Author Topic: Japanese Basket  (Read 16656 times)

Foreign Tuffett

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Re: Japanese Basket
« Reply #60 on: September 05, 2019, 09:57:20 AM »
I own some of those.  Since I started investing in Japan I've hardly ever lost money but many times I haven't made much either.  The currency moved against me a little but the main problem is that these companies simply aren't run for the shareholders.  A lot of times even if the business is decent they'll sit on cash for years on end earning like 4% on equity.  Their business culture is very different.  I forgot where I read it but someone was describing how they bought out a sake brewer.  The guy's family had been doing it for like 500 years or something crazy and then he sold out.  Apparently that was a very unorthodox decision and he was going to be seen as a failure for abandoning the family business.  Price paid, returns on other prospective investments, etc. didn't figure into it.  It kind of reminds me of how people view farm land where i grew up.

One thing I think might be smart, if you think there's a decent chance there's some sort of mass awakening of all these zombie companies, is to look for the ones that hold a lot of securities.  That way you'd get a double re-rate.  But to me it's a big if if this even happens.  It would be interesting to hear from people who are over there what the feeling is.

The sake anecdote is from an article I linked to back in April.

Yeah, I would probably characterize the attitude of the average Japanese management team towards outside shareholders as benign neglect. They aren't actively hostile like Sardar Biglari, Chinese reverse mergers, or some of the Ukrainian companies listed in Poland. It's just that they have other priorities (no layoffs, fortress balance sheet, maintaining the firm's independence, saving face)  that are more important to them than maximizing shareholder value.


CorpRaider

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Re: Japanese Basket
« Reply #61 on: September 10, 2019, 11:42:12 AM »
It is sort of like Teldar Paper before Gordon Gekko.