Monthly Archives: March 2015

March Edition of the JSFB: “Japan”

While Japan has proven to be a difficult market for investors over decades, the past few years have seen dramatic outperformance spurred by the prospects of the outcomes of massive quantitative easing. In fact, the extent to which the eurozone can take some lessons from Japan’s experience as it embarks on its own program is notable. It also leads us to question what else can be learned from Japan, and what are the persistent challenges? Flavor is Information

One of the primary focuses of the emerging field of Culinary Science is flavor. Flavor is a multifaceted and dynamic perception that conveys information about our cultures, our environment and our individuality. The food industry is interested in understanding flavor because it is integral to developing successful healthier products for emerging, maturing, and ageing consumer segments. The research community is interested in flavor because it is an ideal entrée to the brain, one of the final frontiers of science …

The Japan Founders Index

Corporate governance in Japan seems to have improved since the Global Financial Crisis of 2008. Several important developments have occurred, which should improve shareholder returns and how corporations are run. Last year, the newly introduced JPX‐Nikkei 400 Index made it clear that a return on equity of 8% or better was needed for inclusion. This is a very clever way to use Japan’s shame culture to force underperforming companies into taking not-so-popular actions, such as firing employees …

Necessity is the Mother of Invention: How a Culture Steeped in Tradition Deals with Change

In September 2013, I visited the 150-year-old sake brewer Fujii Shuzo, in Takehara city, an old town in Hiroshima prefecture. Ryusei, Fujii’s premium sake, is carefully hand-brewed without the use of chemicals and is known as one of the best sakes in Japan. A couple of months later my family ended up buying Fujii but at the time of my first visit, I had no idea it was even for sale. There are about 1,600 sake brewers in Japan. Usually buying a sake company is virtually impossible. Most are owned by wealthy and respected families …

Mind of the Beginner

The martial arts are split. There are two distinct factions, the Classical and the Modern. Each will claim that their approach is perfect and fits all needs. They are both wrong.
When you imagine the all-white uniforms with the colored belts you are envisioning the Classical style. When you watch people fighting in a cage, you are witnessing the Modern. Classical martial arts, as in all classical arts, is an attempt to precisely reproduce what has come before. Interpretation will come later (much later). Exactness is the goal – and the beauty – of a classical art.

Post-Crises, Japan is a Good Investment

Japan is a country built on reinvention. Even in the most dire circumstances, be it nuclear attack, tsunami or economic recession, its leaders have a history of “bending adversity” repeatedly into prosperous new beginnings. Most recently, after decades of economic stagnation, Japan awoke from its slumber under the energetic leadership …

Corporate Governance in Japan: A Developing Story

What is going on in the universe of corporate governance in Japan today seems revolutionary compared with slow discussions of many years in the past. I can see two distinguished differences. First, the present movement is wholly due to the leadership of the Government of Prime Minister Shinzo Abe. Each ministry and stock market including the FSA (Financial Services Agency), TSE (Tokyo Stock Exchange) …

Market Summary

As we approach the end of the first quarter, the environment for risk assets continues to be favorable with several major equity indices at or near all-time highs. Despite the bullish moves in equities, currency markets are dominating the global investment narrative in light of the dollar’s outsized move higher. Some pundits suggest that currency volatility is a harbinger of instability across other asset classes,

Judges Announced for “Sustainable Games” Competition

Harvard Business School, Intel Education among Business and Entrepreneurial Leaders to Select Winner of $25,000 Prize Five global leaders from across business, the capital markets and academia have been selected as judges for “Sustainable Games:  The Business Model Challenge.”  The competition, which offers a $25,000 prize, is sponsored by Cornerstone Capital Inc., together with the Clinton… Read more »

Environmental Issues & Country Valuations: What Matters?

What Matters? — Some environmental issues that are the subject of popular focus — such as carbon dioxide emissions — do not appear to be statistically significant for global investors. Moreover, many countries’ environmental “health” has moved in the opposite direction of their economic development i.e., more pollution and higher per capita GDP.

The Economics of Automation: Quick Serve Restaurant Industry

Increasing cost pressure. Labor and food represent a significant portion of restaurants’ cost structure. While these inputs have been relatively predictable in the past, the twin threats of rising wages and increasingly volatile food prices suggest a more challenging environment ahead. It’s not clear that cost inflation can be consistently offset by raising menu prices, so companies are considering new strategies to protect margins . . .

Regional and Sector Strategy: March Update

Our regional strategy is unchanged. We continue to have a defensive tilt in our regional recommendations, and are Underweight the commodity-rich regions of CEEMEA and Latin America. Japan continues to be the top-ranked country. Over the past twelve months, share buybacks in Japan have been the largest of any country / region, the first time that country has been the global buyback leader since we launched the regional model in April 2014. We highlight changes in the Energy suggesting, perhaps, that stock prices in the sector have not fallen as fast as earnings estimates . . .