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I got a couple of emails from readers about an article (sub. req.) from Friday's Wall Street Journal. The piece is about the Japanese government lowering the maximum interest rate cap charged by consumer lenders, including portfolio holding Takefuji Corp. (OTC:TAKAF).

My reaction? Well, other than I don't like seeing the position underwater since being recommended in April, I don't really have one. ;-)

I think the market is over-reacting. I may be wrong about that, but I don't think so.

Borrowing money at next-to-nothing and lending it at 20% -- or even the high teens -- isn't a bad business. True, it's not as lucrative as borrowing at next-to-nothing and lending at 29.2%. So the company won't be making as much money and Mr. Market isn't happy.

Yet it will make money.

Also, Takefuji was not priced for perfection when bought. It was, and remains, a hugely overcapitalized company with its shares trading at a discount.

I'm waiting to see what happens with its cash and I'm being patient. This pick could always turn out to be a loser for the portfolio. But we'll see about that in the next few years.

Not the past 90 days.

TAKAF 1-yr chart:

TAKAF 1-yr chart

Source: I Like Takefuji for the Long Haul