By Alec Hogg
A little longer than promised today, but for good reason. We’ve bet on Japanese shares on the BizNews model share portfolio. We have 7% of the capital invested in Tokyo listings. I’m happy after reading what came across my computer yesterday.
___STEADY_PAYWALL___The investment is in the broader Japanese share market via the iShares Exchange Traded Fund – all the Tokyo market’s stocks weighted by size (the ETF is on Shyft and Webtrader). To generate profit, we need Japan Inc to perform better in future – as the graph above shows; this ETF has gone nowhere in the last six years.
Bull Point #1: We were pointed at Japan by value investors Sean Peche of Ranmore Funds. Sean’s in hot form; his fund is currently rated in the top one percentile of its category. In addition, he’s significantly overweight Japan – 21% of his portfolio invested in Toyko listings, more than double Japan’s global weighting of 10%. Click here.
Bull Point #2: Warren Buffett has been so well pleased by the bets he took in Japanese stocks three years ago that he’s returning to the well. In August 2020 his Berkshire Hathaway bought 5% of the equity of Japan’s top five trading houses. He’s adding to those stakes and buying into other Tokyo listings. Click here.
Bull Point #3: Activist US investor Elliott Management has turned its attention to Tokyo, where it has found “some of the most undervalued businesses in the developed world”. Shares in 53% of Japanese public companies trade below book value – and the exchange is forcing them to do something about it. For ease of reference, the FT’s story on how Japanese shares are about to be supercharged is republished below.
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