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Lessons from Japan

Japan is a market that many people have found incredibly frustrating. I think it’s because the average investor often gets caught up in the macro and misses the bottom-up opportunities. The property market peaked in Japan in 1989, so we’ve had a long time to consider Japan’s issues. I wonder, over all those years, how much mental effort has been wasted on analysing Japan from a top-down perspective versus just buying good companies at the right price?

There have been a lot of Quant studies on what’s worked in Japan and what hasn’t; GARP has worked, dividend yield has tended to work, deep value has tended to work.  It’s not our style. We use Quant in a different way, it’s more about screening for anomalies and then using our understanding of industries and sectors, and that’s worked well – but that works well everywhere, not just Japan.

Japan is a great example of not getting caught up in the generalisations and instead, focussing on the industry specifics.

Transcript has been edited for clarity.


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