´´ Value Investing Japan

Friday, November 15, 2019

Investor Z




Zaizen Takashi passes his entrance examine at the top of the heap and is about to start his first year in junior high school at “Dojuku Gakuen”, a 130-year old prestigious institute of higher education. The day after the entrance ceremony, "the secret" of the school is revealed to him: An "investment club”, consisting only of the top students from each of the six grades.

The club members have a mission. They must invest from a capital of 300-billion yen and yield a profit of 8%, which is their annual goal. Therefore “Dojuku Gakuen”, boasting the highest standards of education in all of Japan, is tuition free.

Here begins the fascinating manga about the world of finance and Zaizen Takashi, an investing genius in the making, who bets the entirety of his youth on money and investments. 

Investor Z by Norifusa Mita (Link)


Tuesday, September 24, 2019

Investing in Japan: Getting by on "Yuutai"


I reckon the readers of my blog will be familiar with my investment gurus, namely Peter Cundill, Walter Schloss, Jean- Marie Eveillard, and many others coming from Grahamanddoddsville.

But have you ever heard of Hiroto Kiritani? Until very recently me neither. Mr. Kiritani used to enjoy a minor kind of celebrity status as a top-ranked Japanese player of shogi (kind of an east Asian version of chess). More than a decade ago Mr. Kiritani jumped ship, figuring that he could do a lot better by reinventing himself as an investment guru. Since, he has become kind of a celebrity with Japanese retail investors in an obscure corner of the Japanese investment world called 株主優待 “kabunushi yuutai”, which could be loosely translated into “hospitality.”

Friday, September 13, 2019

J- Links of Interest- Week 37, 2019

I Was Wrong. Startups Are Not the Future of Innovation in Japan by Tim Romero (Podcast)



We talk a lot about Japanese startups on this show and the role they will play in shaping Japan's economic future. Well, today we are going to look at this from a different angle; one that puts the hype aside and looks at some cold hard numbers. The result is sobering, surprising and,  believe it or not, kind of inspiring.

Personal Note: This is one of the best talks about Japan's corporate landscape I have come across so far. The talk is focussing on the highly innovative Japanese medium sized companies, being the main drivers of developing the competitive edge in products only Japan can supply. A must listen for anyone who is really interested in Japan's economic legacy and future potential.

Tuesday, August 6, 2019

Kawasumi Laboratories (JP:7703) - The Beauty and The Beast


Introduction


This post will scrutinize the ever increasing cash holdings and corporate governance issues at Kawasumi Laboratories, a deep value J-Net stock and long term holding of mine.

The stock was first mentioned on the blog in 2012 as a deep value idea. Quantitative metrics in 2012 indicated that the company was trading in the Japanese stock market at a significant discount to its intrinsic value.


Although earnings growth and return metrics have been at best paltry since the initial investment, liquid assets in the form of cash holdings have been ever increasing during the holding period. Although the stock appreciated roughly 75% (excl. Dividends) during that time, the combination of significantly increased cash holdings and absence of interest-bearing debt, has pushed the company into obscene valuation territories, seldom seen in my career as a value investor in the spirit of Graham and Dodd.