´´ Value Investing Japan

Sunday, September 5, 2021

The Hard Money Has Been Made in Japan: The "Iron Coffin lid" Has Been Lifted

Long- Term Japan investors, including myself, have been waiting an eternity for this event to happen. The hard money has been made and the “easy” is to come!

The so called „Iron Coffin Lid“ has been lifted finally. And, much to my surprise, the domestic and international investment community could not care less. 

The degree of ignorance resembles the one surrounding the advent of Abenomics in 2012/2013!

Basically, the „Iron Coffin Lid“ is a resistance bandwidth in the Topix Index between 1700 and 1900 points that had been formed after the Japan bubble popped in the early 1990’s. During the past 30 Years the level has been briefly touched or pierced on several occasions. It was always followed by swift reversals and brutal downtrends often leading to lower lows in the Index. It left Investors and speculators in Japanese equities badly bruised and/ or ruined. 

The “Iron Coffin Lid” should be seen as a main contributor to the narrative of Japan being a buck searching for windshield and bets on the country’s revival a widow makers trade.

Sunday, May 16, 2021

Fukuda Denshi (JP:6960) - Highly Profitable Growth Company at Bargain- Basement Price


Fukuda Denshi is a leading Japanese medical device manufacturer. It offers a wide range of medical equipment products like, among others, defibrillators, patient monitoring, vascular screening -, ultrasound -, stress test - and respiratory systems. In addition, the company provides therapeutic instruments for sleep apnea syndrome and sells AED (automated external defibrillators).

Lately, the company has successfully expanded into the rental medical equipment for home care, including oxygen concentrator devices, which is starting to contribute significantly to the bottom line.

The Company holds high market share within Japan in several business segments that show significant growth, a duopolistic/ oligopolistic market structure and a secular tailwind due to the aging population.

The absence of promotional behavior (limited IR), low trading volume of the stock and no analyst coverage has created a stupendous value dislocation in absolute and relative terms seldom seen in my career as a security analyst and investor.

Basically, the company is a long- term compounder, trading at double liquidation value, spitting out an incredible amount of (growing) free cash- flow while investing significantly in future growth that is totally lacking attention of the Buffett style investors.

Thursday, April 29, 2021

Fax- Appeal - Japanese Still Enamored with Their Fax Machines!

Why does a nation conceived as being High- Tech can’t let go a technology of the 20th Century?


No dear reader, rest assured, this is not going to be another wacky tabloid story about Japan’s backwardness concerning technological adoption.

Rather, it is an investigation about ignorant western correspondents of highly esteemed news outlets like The Guardian, New York Times, Financial Times, Washington Post, Süddeutsche Zeitung, Frankfurter Allgemeine (to name just a few) trotting out stories about Japanese quirks that are nothing more than make-believe the western public. Correspondents not even located in Japan and when, barely speak Japanese, much less read and write it. 

It is not that they are spreading “fake news”, lying to their audience. That would imply they knew the truth. Unfortunately, it is even worse, as they are “Bullshitting” their readers. Pretending being knowledgeable about a region and culture when they really don’t have a clue.

Wednesday, April 7, 2021

Zen- Vesting: The Road to Graham-and-Doddsville - The Journey's End

"Two roads diverged in a wood, and I took the one less travelled by. And that has made all the difference." (Robert Frost)

Maybe there has not been anything in the investing world more talked of, and less understood, than outperformance. It is every investor's wish to outperform the peers and the relevant benchmark. And yet, the great majority of investors do not achieve it. However, do those investors live in a blind and eager pursuit of it. And the more haste they make about outperformance, the further they part from their journey's end.

Wall Street: The Beaten Track That Leads To Nowhere

Most investors are obsessed with outperformance. They follow the cry of the masses and dedicate most of the time scrutinizing the outcome of their actions, and compare it to those of their counterparts.

Investors listening to the siren sound of consistent outperformance should expect to end up on Wall Street. A place occupied by few wealthy and many filthy. They must expect to continue their days in wandering and error.

Wall Street is a beaten track that leads to nowhere and thus, is the most dangerous road to follow in investing. And their companions on this road, instead of helping, try to constantly misguide them. Sooner or later one of those investors following the way to Wall Street will stumble and fall. And then another tumbles upon him. And so they follow, one upon the neck of another, until the road is littered with the corpses of those misguided investors.

That is Wall Street. A street that turns out over and over again to be nothing else than a heap of miscarriages.

Off the Beaten Track to Investment Success: The Road to Graham-and-Doddsville

Let us now turn our attention to what it is the way we should be at in order to “outperform” the beaten track of Wall Street.

If we are on the right track, we will wonder why we are alone for such a long time. Furthermore, shall we find every day how much wisdom we have sought and attained concerning our investment process, companies, ourselves and about others, Irrespectively of the daily, monthly or yearly results of our action or inaction.

Hence, investors who have good chance to "outperform" the market on the long- run are highly concerned about their process. And they are concerned about taking along with them a reliable compass about the companies they invested in, themselves and about fellow investors on their journey. Those investors will end up off the beaten track. A track that leads them to a place of repose. To a little village called Graham-and-Doddsville.

The true felicity of life in Graham-and-Doddsville is that it is free from noise. Here the investor can enjoy the present without any anxious dependence upon the future. In this little village he does not have to amuse himself with either excessive hopes or fears. He can just rest satisfied with whatever security he is holding. Because the margin of safety is abundantly sufficient for the investor that is aware of its ignorance and does not expect anything.

Tranquillity is maybe the most important trait of a “Value Investor”. It is a certain equality of mind. And no condition of fortune and misfortune can either exalt or depress it. Nothing can make it less, because it is the state of the “Value Investor's” perfection.

The value investor that thinks independently, judges correctly, is persistent and enjoys a perpetual calm is the one that will be the most successful. Because he takes a true prospect of the companies he invests in, Mr. Market, live and himself. He observes an order and measure in investing and existence, and squares his professional and individual life in accordance with that reasoning.

He does care about his investments, about the market and life, but he does so without any trouble. And he does so with an indifference towards the wheel of fortune and the opinion of others. Most importantly does he not fear, because fear makes a discord. The investor that fears the market will serve the market. But the market will serve those who are tranquil in mind and patient.

The investor who wants to excel in the business of “Value investing” therefore should not follow the crowd, like lemmings. He must leave the crowd, and govern his actions by reason and not by example.

The question of successfully investing is not to be decided by vote. Far from it. The plurality of voices, especially when diversity has broken down, is an argument of the wrong. Common investors find it easier to believe than to judge. They content themselves with what is conventional, and never examine whether it is right or wrong.



Frances and Henry Hazlitt; The Wisdom of the Stoics; University Press of America 1984

Sunday, March 28, 2021

Zen- Vesting: The Road to Graham-and-Doddsville (5)


"A great traveler was complaining that he was never better off for his travels. "That is very true," said Socrates, "because you travelled with yourself." Now, had he not better have made himself another man than to transport himself to another place?"

There are many proprieties of vice when it comes to stock market investing. One of such are exaggerated expectations and uncertain hopes when venturing into the business of stock market investing. Because the investor with elevated expectations is perpetually anxious and in suspense. And when he has taken great pains in investing to no purpose, he starts to regret his undertaking. He becomes afraid to go on, because he is unable neither to master his expectations nor obey them. He lives, and likely will die, restless and irresolute.

Elevated expectations are the reason that puts most investors upon rambling voyages when it comes to investing. The buy and hold strategy please those investors today, and trading tomorrow. The splendors of growth investing attract them at one time, and the prudence of “Value Investing” another. And all this while they are carrying the plague about themselves.

Those investors have to learn that it must be the change of mind, not of the stock he is investing or strategy he is pursuing, which will remove his inquietude. That his voice goes along with him, whatever stock he is holding or strategy following.

The successful “Value Investor” must keep on its course, independently of market volatility and the opinions of fellow investors. Only then will he get to the journey's end of satisfactory long- term results. The investor that cannot live happily with one strategy will live happily with no strategy.

The frequent changing of strategies and heavy trading in stock shows instability of mind and overconfidence. Those investors interact with Mr. Market just like children run up and down after strange sights. They do so for novelty and not for profit. And they will return from their venture neither better nor sounder.

Quite the opposite! The agitation only hurts them and their clients. They learn to call ticker symbols, name companies and executives, and to tell stories about them. But would their time not have been better spent in studying the simple framework of “Value Investing” outlined by Graham and Dodd, and then the virtues needed to pursue such a strategy, i.e. knowing oneself?


Frances and Henry Hazlitt; The Wisdom of the Stoics; University Press of America 1984

Thursday, March 25, 2021

Zen- Vesting: The Road to Graham-and-Doddsville (4)

“That which we manifest is before us; we are the creators of our own destiny. Be it through intention or ignorance, our successes and our failures have been brought on by none other than ourselves.” (Garth Stein)

In all our undertakings, might they be entrepreneurial or in stock market investing, we must first examine our own strength and weakness. Next, scrutinize the enterprise. And finally, the persons with whom we are dealing with.

It is my opinion that the first point is the most important when it comes to stock market investing. It is so crucial to know oneself because human beings are prone to overconfidence and to overvalue themselves and their skills. Human beings tend to reckon that they know and can do more than really is the case.

Especially in stock market investing should the investor never forget that all market participants are, to a certain extent, slaves to Mr. Market’s wheel of fortune. Some market participants, the “Value Investors”, are only in loose and golden chains. The majority, the speculators, in strait ones.

Even the people on Wall Street that bind most of the market participants are slaves themselves. Some to power, others to wealth. Some to offices, and others to contempt. Some to their superiors and institutions, others to themselves.

Even worse, is not life itself servitude? If it may so let us make the best out of it! Let us mend our fortunes in stock market investing with our philosophy to investing, knowledge about ourselves and fellow investors and virtuous behavior according to that knowledge

Let us not desire anything out of our reach, but rather content us with things we know and hopefully have at hand. Let us do so without envying the advantages and greatness of other investors. Because history has shown repeatedly that greatness often stands upon a shaky precipice.

Thus, let us never forget that it is less spectacular living upon a level, i.e. following the framework to investing outlined by Graham and Dodd and investing only within our circle of competence, but nevertheless much safer and quieter.


Frances and Henry Hazlitt; The Wisdom of the Stoics; University Press of America 1984

Tuesday, March 23, 2021

Zen- Vesting: The Road to Graham-and-Doddsville (3)

The framework of Graham and Dodd is simple but not easy. More importantly, is the framework, like any other, worthless to those investors who do not know themselves. It is also worthless to those who do not have an independent opinion about a stock in question. Is the stock a cigar- but investment? Is it a compounder? Or is it something in between?

To come up with a satisfactory conclusion the "Value Investor" must scrutinize potential investments one by one. He must examine them not on the ground of what they are called by fellow investors, but what they truly are.

It makes no sense to set a high esteem upon wide moat, great management etc., if the investor does not first know what old-fashioned "Value Investing" really is about. Because this investor will never learn about the nuances of Value Investing". The nuances of a stock fulfilling one or more parameters of value, or a stock having a great many of them. They will never grasp how those stocks differ.

The framework to "Value Investing" outlined by Graham and Dodd is of great importance, even for “scuttlebutt” investors. And a few useful and simple rules at hand do more toward succeeding in "Value Investing" than whole volumes of complex ones.

The salutary precepts of "Value Investing", and getting to know oneself, should be the "Value Investor's" daily meditation. Because they are the foundations by which he ought to square his analysis and actions in stock market investing.




Frances and Henry Hazlitt; The Wisdom of the Stoics; University Press of America 1984

Monday, March 22, 2021

Zen- Vesting: The Road to Graham-and-Doddsville (2)

"In character, in manner, in style, in all things, the supreme excellence is simplicity." (Henry Wadsworth Longfellow)

The knowledge taught by the old guards to “Value Investing” was mainly a certain quantitative framework toward stock selection. What to look for in financial statements and what to dismiss. It is a simple framework. And it is my belief that most “Value Investors” are much better off in that simplicity.

For some time, a great many of so called "Value Investors" starting to talk about that there is more to “Value Investing” than just the numbers. And many fellow investors have concluded that more must be learned and done. So, the crowd grew less careful about who they are as an investor and their circle of competence.

The simplicity of “Value Investing”, and its plain and open virtue outlined by the old masters, is nowadays often dismissed. And “Value Investing” turned into a dark and complex science. The new masters of “Value Investing” tell their disciples to think about moats and to discount the distant, unknown cash- flow into the present by using dubious discount rates. They are preaching that it is worth paying up for wonderful business. Or even worse, to dismiss the price being paid for a business at all and concentrate solely on the quality of the business.

There is no doubt that the argument: “It takes more than just the numbers to identify a great company” is justified as far as it goes. But such arguments are wicked. Because often they are taken too far. They are wicked because they lead fellow investors to focus their attention on the company way too much, and dismiss the cheery price paid too easily.

Furthermore, do these "Value Investors" forget to tell their fellow investors that if wickedness was simple, simple remedies also were sufficient to guard against it. But as complexity has taken root and spread through the value investing community, the need to make use of stronger remedies increased too.


Frances and Henry Hazlitt; The Wisdom of the Stoics; University Press of America 1984

Sunday, March 21, 2021

Zen- Vesting: The Road to Graham-and-Doddsville (1)

 “Have not the investors and security analysts eaten of the tree of knowledge of good and evil prospects? And by so doing, have they not permanently expelled themselves from that Eden where reasonable companies, cheaply priced, could be plucked off the bushes?" (Author Unknown)”

Nowadays, the majority of self- proclaimed "value investors" explicitly recommend picking stocks by picking great companies. They are not disciples of Benjamin Graham, whose concept to stock market investing they regard as outdated in a post-industrial era. But rather of Philip Fisher, who advocated a system to stock market investing called "scuttlebutt". The "scuttlebutt" approach involves talking to company managers, employees, customers, suppliers, and knowledgeable people in the industry to identify able managers of companies with extraordinary profitability and growth prospects. 

Or they are followers of Peter Lynch’s approach. Lynch, for example, used to purchase a company's stock based on the CEO’s impressive grasp of retailing facts and figures. This is Peter' s so called Principle Nr.14, which says if you liked the store, chances are you would love the stock.

In short, most "value investors" nowadays are obsessed with finding the next great moat company that will turn out to be a multi bagger. The price being paid for such a company is, at best, only of secondary importance.

Especially the “scuttlebutt” approach is extremely time consuming. Time, I argue, that would be better spent by firstly, studying the simple rules and the framework to investing outlined by Graham and Dodd. Then, to look inside oneself, trying to figure out what kind of investor one really is.

Knowing the basic rules to stock market investing, and more importantly knowing oneself, is not only a precondition for long- term success in value investing. It is also an eminent mark of wisdom.

"Value Investing" is a big tent, often squatted by value pretenders. Investors that keep a thrifty table and lavish out upon their building. The ones that are stingy at home but dissipative abroad. Such diversity of character is vicious because the effect is a dissatisfied and uneasy mind. One that is assaulted by terrible monsters one day and tempted by sirens the other when dealing with Mr. Market.

The wise "Value Investor", on the other hand, lives by rules, is self-aware, knows what he is looking for and acts according to that knowledge when dealing with Mr. Market. Investors who live and act according to that knowledge will walk through their investments instead of being carried by them like a straw in the river.


Frances and Henry Hazlitt; The Wisdom of the Stoics; University Press of America 1984

Tuesday, March 16, 2021

J- Vid of interest; Week 11,2021

Great speach by Gerhard Fasol, a physicist and entrepreneure who has been living for a long time in Japan. He is one of very few foreigners in the boardroom of a listed Japanese corporations. 
While many Japanese corporations are still admired around the world, too many have suffered sluggish growth and low profitability for an extended period of time. Additionally, in 2017 a string of corporate scandals and failures have shocked the public with negative implications regarding confidence in the Japanese business practice.

The government of Prime Minister Shinzo Abe spearheaded corporate governance reforms, mainly a code to improve supervision of management and increase the number of independent outside directors. Mr. Fasol argues that, although change is happening faster than many expected, and the reforms are generally regarded as successful, more is needed to bring diversity into Japanese boardrooms.


Sunday, March 14, 2021

Japan: The Not So Harmonious Society

Before and during the 1960's Japan was a bitterly divided nation. The Liberal Democratic Party (LDP) was in power with a great majority in parliament. Nevertheless, had Japan also had a very vocal left and an active student movement. The socialists and youth wanted to break with the militaristic past and workers were unhappy with their working conditions. Japan was experiencing vicious protests and strikes.

The discontent of the opposition and Japan's youth was not only about their own political and economic elite, but also with U.S.A' s military ambitions in Japan. The U.S stationed weapons, fighter planes and naval vessels all over Japan during the 1950's under a U.S- Japan security treaty signed after the war. The protestors feared that Japan would become a nuclear battlefield between the U.S and the Soviet union.

In the late 1950's the post war military treaty was expiring. Prime minister than was Kishi Nobusuke which legacy would be marked by the turbulent opposition campaign against a new U.S.–Japan security treaty agreed to by his government. No discourse about the new treaty was allowed in the diet. Before the final vote, the protests almost led to the occupation of the parliament building. Only with unprecedented police force could the diet vote on the revised treaty. In the end the new treaty passed with great majority, because the socialists boycotted the session.  By the students and the left this was viewed as high-handed, undemocratic, and provocative act. Large-scale public demonstrations against Kishi and its government erupted, which more and more turned violent.

 But the violent upheaval in Tokyo was only the beginning. Ferocious strikes and bloody protests, eclipsing those in Toyo, were about to spill over to other Japanese provinces.

Friday, March 5, 2021

J- Links of Interest; Week 09, 2021

Japan's problem? Too much competition by Jesper Koll (Japan Times)

One of my favorite questions as an unashamed Japan optimist is “what is the biggest problem of the Japanese economy?” The answer is simple: Japan suffers from too much competition.

Murakami-backed fund exposes sweet insider deal at Japan Asia Group by Stephen Givens (Nikkei Asia)

Though his quest to gain control of Japan Asia Group -- an obscure Tokyo Stock Exchange-listed company engaged in a hodgepodge of "green" businesses -- still hangs in the balance, activist investor Yoshiaki Murakami deserves our admiration for ferreting out and exposing a bid by management insiders and private equity company Carlyle to take JAG private on the cheap.

Japanese stocks have begun to correct from their "irrational pessimism" by Ryoji Musha (Muscha Research)

The breathtaking surge in stock prices continues. The Nikkei 225 index reached 30,000 yen for the first time in 30 years, since the collapse of the bubble economy. Since the beginning of this year (until February 19), Japanese stocks (Nikkei 225) have risen 8.8%, the highest among developed countries.

Japanese Stocks: The Ultimate Undervalued Investment Opportunity (w/ Andrew McDermott & David Salem) (Real Vision Podcast)

The Interview: Recorded on December 14, 2020. David Salem, managing partner of Windhorse Capital Management, welcomes Andrew McDermott, president of Mission Value Partners, an investment firm that invests almost exclusively in Japanese equities. McDermott argues that Japan is a hidden repository of balance sheet strength and Japan's business leaders seem not to exhibit the same bad habits that have ruined so many previously-great American companies, such as Intel and GE.


Over the past 6 years, the Yen-US$ exchange and the Japanese equity market (represented here by the Topix) have moved in a reliably inverse manner. The range of movement has been about 50% greater for the Topix than the currency, meaning that typically two-thirds of equity performance (in US$ terms) was cancelled out by the Yen. This neat relationship broke down earlier this year (figure 1), allowing investors equity gains that were unhindered by currency losses.

Nikkei 30,000: Why it matters by Peter Tasker

So it’s finally happened. Japan’s Nikkei 225 index of stock prices has topped the 30,000 level for the first time in 30 years. The most appropriate way to celebrate this event would be by opening a bottle of 30-year old Hibiki whiskey.

Saturday, February 13, 2021

Japan: No Land for Advocates

The North American nobility is sitting on the advocate's benches and the judgment seats. It is where the aristocracy is to be found. The legally trained are viewed as the most intellectually educated part of the society in the U.S., and they form the inner circle of the political and business elite. This aspect of the North American society is one that has never been copied by Japan.

Japan has had a Western-style legal system, modeled on Germany's, since 1868. But for the common citizen consulting an advocate is something to be avoided.

In 1983, a reporter of the Time Magazin had a closer look at Japan and found, to his astonishment, a land without lawyers. “Most Japanese,” said the reporter, “live and die without ever having seen one.”

Tuesday, January 19, 2021

Nitto Kohki (JP:6151) - Decent Compounder Trading around Liquidation Value

Company Overview

Nitto Kohki, founded in 1956 and headquartered in Tokyo, Japan is a well established Japanese manufacturer of components, tools and machines. Nitto Kohki's products fulfill vital roles in fields ranging from applications in the construction industry, automotive industry, medical device manufacturing and high-tech engineering.

Its mainstay products are quick connecting couplings to join fluid pipes. Customers are mainly found in the field of semiconductors manufacturing and housing construction.

Products of the machine tool segment are mainly steel drilling machines and die machining tools to produce automobiles.

In the segment pumping systems, the company mainly offers linear motor driven pumps with a wide range of applications. Among others in medical equipment and for wastewater treatment systems.

The company has sales subsidiaries in the U.S, U.K, Germany, Shanghai and Australia.

Tuesday, December 1, 2020

The Match Tycoon Ivar Kreuger: Genius or Crook?


It was Saturday the 12th of March 1932, a sunny but chilly early spring day. Andrè Kostolany, the German/ Hungarian speculator, found himself in a tide of compassionate French citizens on the magnificent Champs- Elysée in Paris, where they had gathered in huge numbers bidding farewell to their late president Aristide Briand. Kostolany, who was more of a practical than sentimental personality, took the opportunity to make a detour to his stockbroker, located just around the corner, to check the ticker.

The stock market was open on Saturdays, albeit only for two hours and trading was usually sluggish. It would not be different that specific day, but nevertheless Kostolany would be up for a huge surprise. One company immediately caught his eye. Kreuger & Toll Inc., the company of the famous Swedish financier and match manufacturer Ivar Kreuger. The stock was heavily traded but, somehow mysteriously, the issue would barely budge.

Kostolany immediately figured out the obvious. Banks, on behalf of interested parties, were supporting the share price. It would cost them dearly in the not-too-distant-future and make Kostolany, (who was short the stock) a little fortune. Because what neither the banks, nor Kostolany, were aware of was Ivar Kreuger had met his maker. Lying on the canopy bed in his mansion with a 9mm bullet in his chest. 

Apparently, not all were as uninformed. Among those who knew, was a senior officer from the Police Department. He was lunching with his daughter’s fiancé, an American journalist, and let him in on the little secret, noting that: “I'm sure you will know how to get some benefit from the News. But promise me that you won't pass it on until evening!”

Wednesday, November 11, 2020

Great Stock Market Operators Never Heard Of: Andrè Kostolany


This post will introduce a stock market operator I fortunately encountered early on in my investment career, who saved me a lot of money and had a lasting impact on my philosophy to investing. His name was André Kostolany, a legend in Germany, but unbeknownst to the Anglo- Saxon investment community.

“At the stock exchange 2 + 2 are never 4, but 5 minus 1. Better be prepared to stomach the -1.” (André Kostolany)


It is the story about a speculator whose fame was not founded on the net worth accumulated during his investment career, which remains a mystery. But rather on the amount of practical experience he gained during his 70-year investment journey and his witty and funny way expounding it to his audience.

Kostolany was known for his pleasure-seeking lifestyle and speculating on the financial markets while extensively travelling. A one-minute Audi commercial from 1999 neatly encapsulates his personality, philosophy, and investment style. It even nails the trough of the long-lasting bear market in the commodity sector in one sentence. 

Kostolany was by no means a value investor in the spirit of Graham and Dodd, but rather a speculator resembling Jesse Livermore. He was a diehard contrarian that did not invest in a scientific manner, like running DCF models. He rather ran his operations on a philosophy of creative imagination. He was convinced that investing was not a science, but rather an art form and to be successful one should rather be a philosopher than a finance guy.

Friday, October 23, 2020

Procrastination: The Hidden Value of Delaying

The reason for me to write this little post, which I intended to do a long time ago and have successfully been avoiding for quite a while, is to make the case for procrastination when it comes to stock market investing.

People following a puritanical ideology would like to see procrastination right at the top of the seven deadly sins. But wrongly so! In some professional activities, like sports, design, stock market investing, to name just a few, it should be wholeheartedly embraced. Consciously procrastinating, and astutely combining the different forms, is an art and should strike you as an intelligent behavior.

In ancient times procrastination was highly esteemed. The wisest Greek and Roman leaders and philosophers were masters in playing pocket billiard. They would basically sit around all day long doing nothing apart from thinking and debating. Only when they truly had to would they move their bloomin’ arse.

Viewing procrastination as a sin is quite a new phenomenon coming up in the 17th century, a time the puritans gained the upper hand in society. One of their main advocates was Jonathan Edwards’s, who declaimed over and scared the hell out of procrastinators:
"Those who delay doing good works flatter themselves that they shall see another day, and then another, and trust to that, until finally most of them are swallowed up in hell, to lament their folly to all eternity, in the lake that burns with fire and brimstone.” 

Saturday, October 10, 2020

Yodogawa Steel Works (JP:5451): A J- Net Beauty with Loads of Hidden Assets

Company overview

Yodogawa Steel Works, Ltd. is an independent Japanese steelmaker located in Osaka. It mainly provides surface treated steel sheet. It is particularly strong in color steel sheet.

The Company operates in four business segments. The Steel Sheets-related segment manufactures and sells coated steel sheets, galvanized steel sheets and cold-rolled steel products. The Roll segment is engaged in the manufacture and sale of steel rolls, non-ferrous rolls, etc. The grating segment is engaged in the manufacture and sale of gratings. The Real Estate segment is engaged in the leasing and sale of real estate.

Most of its products are provided to corporate customers, such as building contractors and consumer electronics maker, but the company also handles household use storerooms, carports, and photovoltaic power generation, among other things, for general consumers.

It runs plants in Osaka, Kure, Ichikawa, Fukai and Izumiotsu. It started steel sheet sales through own sales offices. It also has a large overseas plant in Taiwan. The joint venture subsidiary, which operates the Taiwanese plant, is listed on the Taiwan Stock exchange. The company also set up local firms in Taiwan and China to produce and sell surface treated steel sheet.

Thursday, October 8, 2020

J-Links of Interest, Week 41 2020

Pac-Man: How a faceless character based on eating changed video game history by Russel Thomas (Japan Times)

The nationwide release of the arcade version of Pac-Man in July 1980 marked a pioneering moment in the history of video games, introducing a rare nonviolent character for players to control and sowing the seeds for a cultural and commercial legacy that continues to endure to this day.

What can we learn from 'Made in Japan'? by He Jun (Japan Times)

The Japan-South Korea trade friction revealed that South Korean companies, even though they have dominated the semiconductor market for many years, still need Japanese suppliers in the semiconductor industry. That means Japanese companies can easily exert pressure on the Korean giants. Has the world been underestimating Japan’s companies — not to mention the country’s economic strength and technological innovation?

'Pure Invention': How Japan's pop culture became the 'lingua franca' of the internet by Matt Schley (Japan Times)

Toys. Video games. Portable music players. Kawaii characters. Anime. When it comes to modern pop culture, we’ve all turned Japanese.


It's hard to imagine a world without Pac-Man.. That yellow pellet eating machine has burned himself into the pop-culture consciousness in a way few fictional characters have. From the initial video game that ate up as many quarters as the titular hero ate cherries, to cartoons, shirts, toys, and the endless supply of merchandise. The game even had a song that reached number nine on the Billboard Hot 100 in 1982. How bonkers is that?

How Japan’s global image morphed from military empire to eccentric pop-culture superpower by Marc Bain (Quartz)

In just a few decades, Japan’s global image has changed radically, especially in the West. Particularly in America, which has had a close and complex relationship with Japan since World War II, this image has evolved from fearsome enemy to producer of cheap cars and gadgets to, finally, whimsical creative fantasy factory.

From Astro Boy to Gundam to Ultraman, how Bandai became Japan’s top toy company by Julian Ryal (South China Morning Post)

Now 32 years old, Sho Ueda remembers the thrill he felt as a nine-year-old when his father bought him his first model from the Mobile Suit Gundam anime series. With massive red-and-white shoulder protectors, powerful robotic legs and headgear reminiscent of a samurai warrior’s helmet, Ueda says he was hooked after building his first “Burning Gundam” model.

Tuesday, September 22, 2020

Ryoyo Electro (JP:8068): Anatomy of a Hostile Takeover Battle that Has Gone Awry


The stock was first mentioned on the blog in March 2012 at a price of 944 Yen as a deep value idea.

Little did I know that this simple deep value investment would turn out being a full- blown fight over corporate control between two Japanese companies.

On August 31st I got a poisoned birthday present. Ryoyo announced that it would buy back roughly 27% of its shares at 2’990 Yen via a Tender Offer. The repurchase amount is ¥22 billion, exactly the entire cash at hand as of Q2 2020.

The Journey

The investment faced a rocky start, with huge price swings in 2012- Volatility abated a little in 2013, but the stock was not really moving, and the yen depreciation severely depressed the performance in Euro terms.

Wednesday, September 9, 2020

Just for the Record - Sell Ryoyo Electro (JP:8068)

Sold today Ryoyo Electro for 2’683 Yen per share. A stock I mentioned on my blog roughly 8 years ago at 944 yen.

By than Ryoyo was a debt- free deep value stock with enormous assets in form of cash, receivables, inventory and liquid investments that traded below its liquidation value.

The percentage gain (without dividends) is a 184 %. Including dividends received (before Taxes), which were 420 Yen per share, the percentage gain comes in at 229%.

A more detailed analysis on the rational to buy into the stock and the reason for selling out is coming up soon!

Monday, August 10, 2020

TOB Kawasumi Laboratories: The Beast That Never Really Turned into a Beauty


With all likelihood, this is the final post on Kawasumi Laboratories, a longtime holding of mine that was mentioned on my blog two times in the past.

Friday the 31st of July Sumitomo Bakelite announced its intention to takeover Kawasumi Laboratories at a price of 1'700 Yen. An offer which would result in a performance of 318% (incl. dividends before tax) over a period of almost exactly 8 years. And my first Japanese stock where I made the serious money basically within three days.

I have not tendered my shares to Sumitome Bakelite or sold them on the market yet. Before doing so it is time to contemplate. Writing to myself a brief presentation of my initial investment case, a recap of my rather long and wearisome journey in this “deep value” sphere of stock market investment and finally, an in depth analysis of the takeover offer, reasoning if it is attractive or not and if there is any chance of a significantly bettered offer.

Friday, July 24, 2020

'Gama- Gaeru': The Most Celebrated Ceramic Toad in Stockmarket History

This little post will neatly encapsulate the popular delusions and sheer madness of crowds brought forth by the Japanese stock market bubble of the late 1980’s.

The genesis of this story lies on the fourth floor of an awfully exclusive Ryotei restaurant owned by Nui Onoue in Osaka, a grandmotherly lady in her 60’s. She was a fervent disciple of several bizarre and mystic religions and rituals who, during the go- go years of Japan’s stock market bubble, would amass a fortune and at the pivot point of her divine undertakings would become the wealthiest woman in Japan. 

Within Osaka, the toad is known as “Gama-Gaeru” or "toad-frog". Especially among Osaka's entrepreneurial business elite it is regarded as a minor deity, which possesses a good luck charm that attracts good fortunes to its owner. 

But Ms. Onoue’s toad was one of a kind, an amphibian Warren Buffett. It was incredibly successful in its role as a money magnet and at the peak of this grotesque story the toad would control a 20bn US Dollar stock portfolio.

In the process of the miraculous wealth accumulation Ms. Onoue, who later would be known within Japan as the “dark lady from Osaka”, would become the largest individual shareholder in three of the world’s biggest companies.

Thursday, July 9, 2020

J- Links of Interest- Week 28, 2020

Capitalism that work — Lessons from Japan | Jesper Koll | TEDxTokyo

This talk shares how Japan continues to be a leading country and it's potential to have a bright future from the lens of an economist. Jesper Koll has been researching and investing in Japan since he became a resident in 1985. He has been the head of research and chief strategist for major US investment banks and currently serves as senior advisor to several Japanese and global corporations, investors, This talk was given at a TEDx event using the TED conference format but independently organized by a local community.

The Small Giant Tree-Ring Management

Deep in the woodlands of the city of Ina in Nagano Prefecture is a company named Ina Food Industry Co., Ltd. with 531 employees that makes and sells products using the gelling agent agar. Despite its relatively small size compared to food industry powerhouses, the company hosts a never-ending stream of highly prominent visitors, including management teams from Toyota Motor Corporation and other global companies and the Governor of the Bank of Japan.

Ootoya eateries face 7.1bn yen takeover bid by cost-cutting peer

Japanese restaurant operator Colowide on Friday will launch a tender offer on Ootoya Holdings, after its push to cut its compatriot's costs and streamline operations was rejected at last month's shareholders meeting, the company announced on Thursday.

Japanese trading house Itochu announced on Wednesday it will take full ownership of the FamilyMart convenience store chain, raising its stake from just over 50% through a tender offer.

Friday, June 26, 2020

J- Vid of Interest: - The Beginnings of Japan's Robot Revolution

Will Japans automated industry wipe out the need for humans in the work place. 'TV Eye investigates the changing face of the Japanese worker.
First Shown: 11/02/1982