Capital Cyclists

Japan: Land of the Rising Shareholder

Oct 12, 2023

Experienced equities broker, John Seagrim, discusses the undervalued assets and hidden value in Japanese equities. They explore the impact of historical events on Japan's corporate mentality and the country's recent positive trajectory in investments driven by government initiatives and improving corporate governance.

28:31

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Episode guests

John Seagrim

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Quick takeaways

Corporate Japan's risk aversion rooted in past traumas influences conservative financial practices.

Undervalued Japanese enterprises offer investment opportunities through asset management restructuring.

Deep dives

The History of Japanese Financial Markets and Corporate Mentality

Corporate Japan operates with great risk aversion, hoarding cash due to a historical fear of economic instability post the 1990 bubble burst and subsequent natural disasters like the tsunami and earthquakes. Companies like Rini maintain massive reserves akin to an Armageddon fund, reflecting a cautious approach rooted in past traumas and societal anxieties, leading to a shift from high-risk gambling mindsets to conservative financial practices.

Introduction

2min

Transformative Shifts in Japanese Corporate Culture and Investments

17min

Evolution of Activism and Engagement with Japanese Companies

3min

Evolution of Shareholder Value in Japanese Companies

2min

Evolution of Japanese Companies and Investment Opportunities

4min

Steven Chambers, analyst at Hosking Partners, interviews CLSA’s John Seagrim and Jeremy Hosking for the third episode of Capital Cyclists.

John started his career as an equities broker 10 days before Black Monday in October 1987. Two years later he joined Lehman Brothers just as the Japanese stock market peaked, and, in his own words ‘has been riding, or more accurately sliding, with Japan ever since’. From a stock market perspective, Japan has seldom been as insignificant as it is today, it represents a little over 4% of the aggregate global stock market capitalisation despite being one of the world’s largest economies. John and Jeremy think this is the nadir for equity valuations. Their discussion is hot on the heels of Jeremy’s recent investor trip and Hosking Partners’ first overweight exposure to Japan. They perceive extraordinary, often hidden, value in Japanese equities at a moment when the country appears to be at an historic turning point.

For more information and to get in touch, please visit www.hoskingpartners.com

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Capital Cyclists

Japan: Land of the Rising Shareholder

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The History of Japanese Financial Markets and Corporate Mentality

Shift Towards Value Investing in Japanese Market

Unveiling Hidden Assets and Encouraging Shareholder Activism in Japan

Remember Everything You Learn from Podcasts