We Study Billionaires - The Investor’s Podcast Network

TIP565: Why Buffett is Doubling Down on Japan w/ Dan Rasmussen

Jul 16, 2023

Dan Rasmussen, Founder and Portfolio Manager of Verdad, shares his contrarian perspective on Japan's undervalued stock market. He argues that Japanese equities present some of the best valuations globally, contrasting them with overvalued US stocks. The discussion includes Japan's recent economic evolution, the impact of yield curve control, and how rising interest rates are shaping corporate earnings. Rasmussen also touches on financial literacy and emerging technologies, urging investors to reconsider opportunities beyond conventional markets.

54:33

Episode guests

Dan Rasmussen

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Highlights

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Allocating heavily to private markets without understanding risks can lead to potential pain in portfolios.

Investors should consider international markets like Japan, which offer rich opportunities and cheap valuations.

Value stocks offer a better long-term investment profile compared to expensive glamour stocks.

Deep dives

Contrarian Views on Private Markets

The podcast discusses the host's skepticism towards private markets, particularly private equity, considering it an overdone and risky asset. He believes that many investors are heavily allocating their assets to private markets without fully understanding the associated risks, leading to potential pain in their portfolios.

The Potential of Japanese Small Caps and Cash Return

00:34

The Relationship Between Interest Rates and Real GDP

02:35

Are pension funds and big endowments heavily weighted towards US investments?

02:56

The Effect of Higher Interest Rates on Company Earnings

02:23

Intro

2min

Challenging Investment Norms

15min

Investing in Japan's Market Dynamics

6min

Investing in Japan: A Cultural Comparison

17min

Investment Insights: Japan vs. US Valuation Gap

6min

Interest Rates and Market Dynamics

10min

Skepticism Meets Enthusiasm: The Dual Perspective on Emerging Technologies

4min

Clay Finck chats with Dan Rasmussen about why Japanese equities offer some of the most attractive valuations in the market today, how stretched growth stock valuations are relative to value and much more.

Dan is the Founder and Portfolio Manager of Verdad, which is a global asset management firm that strives to achieve the highest risk-adjusted returns possible through rigorous research and its practical application.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro.

01:45 - Contrarian views of the market Dan holds relative to the rest of the market.

05:14 - Why the US is overvalued relative to international stocks.

09:19 - Historically how undervalued value indices are.

13:27 - Why Dan is bullish on Japan.

13:44 - The value mandate that Japan put in place to try and juice stock market valuations.

24:11 - Dan’s views on Japan’s policy of yield curve control.

24:42 - What’s keeping investors away from Japan’s stock market.

30:57 - What the financial accelerator is and how it relates to the 2023 banking crisis.

36:12 - How equity markets tend to behave after a Fed pause.

36:30 - How high-interest rates are affecting corporate earnings.

51:21 - Dan’s views on the Chaos Kings and their strategy of Crisis Investing.

60:40 - How Verdad’s portfolios are positioned today.

72:21 - What technologies excite Dan in creating a better society for the future.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Check out of our review of Microcap Investing with Ian Cassel, or watch the video here.
Follow Dan on Twitter.
Follow Clay on Twitter.

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