Opportunity in the Land of the Rising Sun

Published on
December 16th, 2020
Duration
82 minutes

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Opportunity in the Land of the Rising Sun

The Interview ·
Featuring Andrew McDermott and David Salem

Published on: December 16th, 2020 • Duration: 82 minutes

David Salem, managing partner of Windhorse Capital Management, welcomes Andrew McDermott, president of Mission Value Partners, an investment firm that invests almost exclusively in Japanese equities. McDermott argues that Japan is a hidden repository of balance sheet strength, and he and Salem discuss why Japan's business leaders seem not to exhibit the same bad habits that have ruined so many previously-great American companies, such as Intel and GE. McDermott breaks down his analysis of specific companies such as Hitachi, Sazaby, and Daiichikosho Co., and then he tells Salem about the time Warren Buffett called him to seek out his knowledge and advice on investing in Japan. McDermott and Salem also reflect on macroeconomic factors such as demographics and Japan's government debt burden. Filmed on December 14, 2020 Key Learnings: Japanese equities are one of the least-loved and arguably most misunderstood asset classes in the world. But they offer opportunity to the thoughtful investor, as the management of Japanese companies are more prudent and sensible with their allocation of capital.

Comments

Transcript

  • SS
    Stephen S.
    16 December 2020 @ 15:51
    We’ll see if Japan’s decisions over the last 20 years were “always wrong”. Maybe they didn’t have a lot of GDP growth but they have a stable society. More than we can say in the US.
    • AF
      Andre F.
      17 December 2020 @ 19:42
      "Stable" A word that obscures the unvarnished truths that many, many visitors and foreign residents have said about Japan for a long time.
    • TE
      Tito E.
      17 December 2020 @ 19:45
      True Stephen. And GDP per capita is high. Far more representative of quality of life than GDP.
    • TP
      Timothy P.
      31 December 2020 @ 15:49
      The Japanese Govt owns approximately 25% of the Nikkei. Funny how that doesn't bother anyone. The backstop of last resort is always ignored until it fails. Their demographics are a disaster. Too many dependent older people, not enough young people to support them. The only thing I'd be interested in is Japanese Put options.
  • PF
    Pedro F.
    22 December 2020 @ 20:52
    This is one of the most important, consequential conversations in the whole archive. As illuminating as it is depressing.
    • DS
      David S. | Contributor
      27 December 2020 @ 00:18
      Pedro: I'm pleased you found my conversation with Andrew useful. He is an intreprid as well as clear and original thinker, IMHO. Best wishes for a healthy and prosperous new year. David Salem
  • PG
    Philippe G.
    16 December 2020 @ 19:03
    Fantastic!
    • DS
      David S. | Contributor
      21 December 2020 @ 17:32
      Thanks, Phillippe. I'm pleased you enjoyed the interview. All credit to Andrew McDermott for providing all of us with so much wisdom and insight.
  • JF
    Jack F. | Real Vision
    19 December 2020 @ 21:55
    Hi all, Andrew wanted me to share the following with you: http://www.thegreatstory.org/glubb.pdf It's "The Fate of Empires and Search for Survival" by Sir John Glubb
  • GL
    Gary L.
    17 December 2020 @ 01:08
    Doesl Vision still cover gold? Have not heard much about the shiny stuff for a while. Seems RV is all in on Cyrptos. My dear friends!
    • JF
      Jack F. | Real Vision
      17 December 2020 @ 04:37
      Hi Gary, gold remains a priority for us. Our last marquis piece on the subject was with Raoul and Kiril Sokoloff: https://www.realvision.com/tv/videos/id/3e0f2147e2b64b418d61b8732364a03c I am interviewing Lyn Alden tomorrow for her 2021 outlook (it is airing in January). I will try and get her to give her updated views on "the shiny stuff," as you say.
    • MW
      Max W. | Real Vision
      17 December 2020 @ 13:46
      Also big Gold interview going out this Friday
    • AF
      Andre F.
      17 December 2020 @ 19:56
      Hello Jack, I might be too late in making this request for your interview with Lyn today. Interest and info on Gold will keep coming for a while yet, but I'm interested in a couple other things that are not getting a ton of interest. Could you please ask Lyn her outlook on base metals for the next 24 months and also fertilizer and potash, same time period. If you can't work that in for this interview please keep it in mind for a future interview. Thank you.
  • CB
    Clifford B.
    16 December 2020 @ 10:49
    Great all round interview.
    • JF
      Jack F. | Real Vision
      17 December 2020 @ 04:33
      Cheers Clifford! This interview was one of my personal favorites
  • RB
    Richard B.
    16 December 2020 @ 11:10
    Excellent. Best way to invest in his fund? One question to explore further is the quad v china's military rise, with japan being at the centre of this new cold war. How does a re;armed japan do so much business with China? the australian example is apro po? Could hurt tourism, export of japanese high end products etc to china?
    • JF
      Jack F. | Real Vision
      17 December 2020 @ 04:33
      Hi Richard, I am almost positive that Mission Value Partners only accepts allocations from accredited investors. If you are still interested, you can email me at jack@realvision.com
  • TT
    Tokyo T.
    16 December 2020 @ 12:33
    Nice interview, please have an update next year.
    • JF
      Jack F. | Real Vision
      17 December 2020 @ 04:31
      Hi Nick, I am glad to hear you enjoyed the interview
  • SB
    Stefan B.
    16 December 2020 @ 13:11
    What about for example Ishares japan? Or are they disproportionally in the wrong sectors/companies?