I initially began my cheap Japanese basket in March 2023 and now that 2023 has come to an end, let’s take a look at how everything worked out. But first, a quick summary of the themes in my basket and why I’m broadly still bullish on deep value Japan.
Congrats on building this amazing portfolio... I like your approach of deep value but no melting ice cube. On the good growth high RoE I have build a good size position on Yamada and Murakami. Thanks for mentioning my personal blog..have a great year.
Tax los selling 1758 was a mistake, it's up 8% today. Oh well! First trading day of Japan is a massive out performance for deep value. Nikkei down 1%, Topix flattish, but almost everything in my deep value portfolio is up strong.
Tohbu Network up 12% on 24x daily volume. Can't complain!
My main concern with such a huge Japanese allocation is the escalation of China-Taiwan. China is Japan's largest trading partner at 20% of total trade, so even if the conflict does not go hot, there are a lot of potential risks there.
Altay - a question for you. How do you go about sourcing financial info for these companies? Disclosures for a lot seem Japanese only, and translation services (google translate etc) are of varying usefulness. Do you just take koyfin/etc. #s at face value? Or have a BB terminal or some other paid service? Cheers and congrats on the trades!
It’s interesting to note how the weak yen has been a boon for many Japanese companies by boosting their export competitiveness. However, the scenario could change dramatically if the yen appreciates by about 40%, as predicted by some macroeconomic experts. This appreciation would likely increase the cost of Japanese goods in international markets, potentially diminishing their global market appeal. Such a shift could adversely affect the revenue and profitability of export-reliant Japanese firms.
What are your thoughts on this? Do you foresee any additional impacts or have a different perspective?
Congrats on an outstanding year. It's a very solid result given no US exposure and with your portfolio still looking very cheap.
Congrats on building this amazing portfolio... I like your approach of deep value but no melting ice cube. On the good growth high RoE I have build a good size position on Yamada and Murakami. Thanks for mentioning my personal blog..have a great year.
Loved your thinking here!
Some of the net nets have hilarious names, e.g. the ominous “Human Holdings”
... wish there were equivalents to the Japan Company Handbook for other countries
Since this post many of these names have done remarkably well. I have not sold any of these positions:
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
Other names have increased as well, but these remain cheap.
Yamada (6392) has absolutely killed it since posting this. The position is up 80% now total. The JP portfolio has had a remarkable good January.
Tax los selling 1758 was a mistake, it's up 8% today. Oh well! First trading day of Japan is a massive out performance for deep value. Nikkei down 1%, Topix flattish, but almost everything in my deep value portfolio is up strong.
Tohbu Network up 12% on 24x daily volume. Can't complain!
My main concern with such a huge Japanese allocation is the escalation of China-Taiwan. China is Japan's largest trading partner at 20% of total trade, so even if the conflict does not go hot, there are a lot of potential risks there.
Altay - a question for you. How do you go about sourcing financial info for these companies? Disclosures for a lot seem Japanese only, and translation services (google translate etc) are of varying usefulness. Do you just take koyfin/etc. #s at face value? Or have a BB terminal or some other paid service? Cheers and congrats on the trades!
Solid year! Congrats👍
It’s interesting to note how the weak yen has been a boon for many Japanese companies by boosting their export competitiveness. However, the scenario could change dramatically if the yen appreciates by about 40%, as predicted by some macroeconomic experts. This appreciation would likely increase the cost of Japanese goods in international markets, potentially diminishing their global market appeal. Such a shift could adversely affect the revenue and profitability of export-reliant Japanese firms.
What are your thoughts on this? Do you foresee any additional impacts or have a different perspective?