"Investors in Japan had it easy. They could buy net-nets at under 8 P/E with 20+ years of profitability. Of course they’re going to make outsized returns" -Future Value Investors
Altay, you've been remarkably consistent in your perspective on undervalued Japanese equities, and I've thoroughly enjoyed following along. Regulatory changes causing real actions have caused me to step back and consider that I might actually have to reevaluate being on the sidelines and establish a basket of such names. Looking forward to your future updates.
I think there's a problem with deep value investors in the west who're are used to a more M&A and activist friendly environment that tends to close a value gap incredibly fast, even for stocks that have worse asset and earnings quality than many Japanese stocks. I'm mostly a bank investor in the US market (with a few JPY positions) i see the same on this side of thing, sometimes you will have to wait 5 years to close a deep discount with no catalyst in sight and most investors will throw in the towel, even if it has 10-20 years of historical profitability/asset quality etc. It's really hard for me to say I'd rather own a net net in the US that has losses vs a Japanese one that's a double net net or at net cash with 10+ years of free cash flow but that's how a lot of folks here feel like. Great post, always excited to read.
Shareholders should contact IR for their Japanese co's trading at discounts asking why they aren't on the Tokyo Stock Exchange list of companies complying with their requests. I did for my entire port with respectful emails (JP via ChatGPT) asking what customers and biz partners would think about them ignoring rules. Super friendly /w link to rules.
Since the list was published by the TSE, many of my names have absolutely flown.
The #1 performer is now Terasaki Electric (6637) which went up from 1,779 to 2,420 and is now up 94.5% since my purchase.
Sanyo (5958) is up from 2,669 to 3,495
Kinki Sharyo (7122) is up from 1,748 to 2,271
Yamada Corp (6392) is up from 4,111 to 5,490
Fuji Sangyo (9906) is up from 2,389 to 2,678
#s are since my last post.
Other names have increased as well, but many remain cheap.
Altay, you've been remarkably consistent in your perspective on undervalued Japanese equities, and I've thoroughly enjoyed following along. Regulatory changes causing real actions have caused me to step back and consider that I might actually have to reevaluate being on the sidelines and establish a basket of such names. Looking forward to your future updates.
I think there's a problem with deep value investors in the west who're are used to a more M&A and activist friendly environment that tends to close a value gap incredibly fast, even for stocks that have worse asset and earnings quality than many Japanese stocks. I'm mostly a bank investor in the US market (with a few JPY positions) i see the same on this side of thing, sometimes you will have to wait 5 years to close a deep discount with no catalyst in sight and most investors will throw in the towel, even if it has 10-20 years of historical profitability/asset quality etc. It's really hard for me to say I'd rather own a net net in the US that has losses vs a Japanese one that's a double net net or at net cash with 10+ years of free cash flow but that's how a lot of folks here feel like. Great post, always excited to read.
Shareholders should contact IR for their Japanese co's trading at discounts asking why they aren't on the Tokyo Stock Exchange list of companies complying with their requests. I did for my entire port with respectful emails (JP via ChatGPT) asking what customers and biz partners would think about them ignoring rules. Super friendly /w link to rules.
What about buying whole etf of small caps like SCJ?