´´ Value Investing Japan

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.

Thursday, July 11, 2019

Still Surprised Getting Surprised Investing in Japan

Apparently Bloomberg News is!

Blue Chip Bounce: Bandai Namco Limit Up on Nikkei 225 ‘Surprise’ (Bloomberg)

Japan can be quite an odd place investing in publicly trading companies. Most of the time it is exciting as watching paint dry. But all of a sudden the investing thesis is getting vindicated, although not seldomly only temporarily, in a short period of time. In other jurisdictions the reasons for such revaluations of companies on the stock market would have "minor" impacts price wise. In Japan they can be huge! Almost like TOB announcements.

Today we are talking about Bandai Namco (JP:7832), a core position of mine for a long time. Mentioned on the Blog Here and Here!