Money For the Rest of Us

Why Japanese Stocks Could Outperform with Howard Smith - FEG Insight Bridge

Mar 5, 2025

Howard Smith, a veteran in Japanese investments and Partner at Indus Capital, joins Greg Dowling, Chief Investment Officer at FEG Investment Advisors, to discuss why Japan may surprise investors in the coming decade. They debunk myths surrounding Japan's investment climate, focusing on the undervalued yen and improving corporate governance. The conversation highlights booming opportunities in tech and addresses fiscal sustainability amid Japan's debt. Cultural nuances and economic history enrich their insights, making Japan a captivating investment destination.

48:15

Episode guests

Greg Dowling

Howard Smith

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Investors are beginning to shift their perceptions of Japan's market viability due to improving corporate governance and investment opportunities.

Japan's resurgence in the semiconductor industry, paired with significant foreign investment, positions the country favorably for future economic growth.

Deep dives

Warren Buffett's Investment in Japan

Warren Buffett's decision to invest in Japanese companies marks a significant moment in the realm of international investments, especially concerning Japan. Buffett cited the impressive financial records of these Japanese firms, noting their operations are akin to Berkshire Hathaway's own business principles. This renewed interest comes in contrast to the historically perceived challenges within the Japanese market, including an aging demographic and previous stagnation. Despite these challenges, Buffett anticipates increasing his stake, reflecting a potential shift in how investors view Japan's long-term market viability.

Intro

5min

Understanding Japanese Markets: Cultural Insights and Economic History

4min

Japan's Economic Landscape: Tradition and Transformation

24min

Assessing Japan's Fiscal Sustainability and Economic Challenges

2min

Japan's Corporate Landscape: 7-Eleven and Beyond

13min

Cultural Reflections: Food, Anime, and Farewells

2min

This week on episode 514, we share a conversation between Howard Smith of Indus Capital and Greg Dowling of FEG Investment Advisors on why Japan could surprise investors over the next decade with strong investment returns. David introduces the episode by sharing his key takeaways from the discussion.

FEG Investment Advisor is David's former institutional advisory firm, where he worked for 17 years, before founding Money for the Rest of Us. Greg Dowling is Chief Investment Officer of FEG, and David's former business partner and colleague.

Topics covered in the episode include:

The false narrative that Japan is a difficult place to invest with subpar returns
Why Japan's national debt problem is not as worrisome as the U.S. national debt
Why the Japanese yen is tremendously undervalued
How Japan's corporate governance has improved
Opportunities in Japanese technology industries

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Show Notes

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