S3E5: 🎌 Value Investing in Japan

In our last episode we interviewed Nick Mishkin

S3E4 🤗 Being Intelligent about Emotions with Nick Mishkin

who mentioned Keith Chen’s research about futured languages. In that chat, he mentioned Japanese is not a futured language, which leads us to this episode where we spoke with @CacheThatCheque (https://twitter.com/CacheThatCheque), a value investor in Japan!

CTC mentioned a few resources to help foreigners get to know the Japanese market, such as the Buffett Code screener (https://www.buffett-code.com/), which is easy to use in conjunction with Google Translate. He recommended searching for blogs in Japanese for deep dives on businesses brought up by the screener. Examples of such blogs are:

1. https://tsubame104.com/archives/category/%e9%8a%98%e6%9f%84%e5%88%86%e6%9e%90

2. https://net-net-value.com/totalranking/

3. https://tsubame104.com/archives/5126

4. https://toushi-matomeblog.com/

5. https://tsubame104.com/

In terms of his portfolio, CTC lists it here:

CTC @CacheThatCheque

Many have asked about my Japanese dividend portfolio, so I have decided to do a portfolio reveal. I have 25 positions total. I used to have more, but I ended up cutting and consolidating some positions (in hindsight, some regrettably). My positions below by weight/yield

One business he focused on from it during the interview was Eiwa (https://www.eiwa-net.co.jp/english/).

As such, CTC gave us a great overview of the Japanese market and some useful tools to find one’s way around it as an outsider.

Perhaps the most important thing, however, was the discussion at the beginning on how Japan isn’t the dull place it has long been thought to be. It has grown at the same rate as Western markets in the past ten years, for example. With half the market available for purchase net of cash, much opportunity awaits for activist investors.

As an aside, here is a very popular recent ergodicity-breaking tweet:

Adam Goldstein @goldstein_aa

@IlariLehti @ergofin @breakingthemark @BradCameron25 @AbsoluteGnosis @CMerrill999 @edwin_teejay @Marc_Elsberg @leighblue @JosephNWalker @ole_b_peters @alex_adamou Don't know if anybody has mentioned this before, but the "Farmer's Fable" concept is actually implemented in real life by Blackjack (and probably other card games, like Poker) pools, where players share P&L to maximize growth rate. Example:

blackjackapprenticeship.comHow to Start a Blackjack Team - Blackjack ApprenticeshipA comprehensive description of the mechanics of starting or joining a blackjack team from pros who ran one of the largest blackjack teams in America.

WHAT WE DO

We solve the mathematical problem of causing an enormous increase in one's bank account balance through human effort. The podcast therefore has two themes, mathematics and human behaviour. Together, behavioural investing. We take a first principles approach by summarising scientific studies and interviewing psychology and mathematics researchers. This will show us the first principles. We will then reason from these first principles to the best strategy to cause optimal human investing behaviour.

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