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Jacob L. Taylor

 
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  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Great observations, flash9, and thank you for the kind words. When exploring the deals to be found over there, we couldn't help but think of Buffett's 1974 quote from Forbes when they asked him how he was feeling: "Like an oversexed guy in a whorehouse. Now is the time to invest and get rich." We could barely sleep either the first few weeks. :)

    That is an interesting side note. We have an admitted bias toward strong balance sheets and abhor debt, but it makes sense that some of the higher-debt stocks would do well as they've been even farther discounted for failure-- the investing equivalent of nuclear waste. Those that survived probably had huge returns.
    Sep 25, 2011. 12:38 PM | 2 Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    UPDATE:

    Here are the returns for our MBA class's portfolio after one full year of holding:

    Class Japan Portfolio: +4.4%
    S&P 500: +7.4%
    Nikkei: -11.6%

    Obviously the absolute return of 4.4% is a little lackluster, but one rotation of the earth around the sun often doesn't coordinate itself with the full unlocking of value. That said, doing 16% better than the Nikkei is certainly encouraging. All those intelligent analysts who cautioned against buying "Japan" may have been right, but they likely weren't referring to our collection of dramatically undervalued businesses. It stands as a reminder that as a small value-investor, you aren't buying "the market," so all that doom and gloom doesn't necessarily apply. We prefer to think like an intelligent business-person instead and be ready to take advantage of Mr. Market's schizophrenia.
    Jul 23, 2012. 01:48 PM | 1 Like Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    That's an interesting idea, kwm3. I'm not sure how expensive it would be to implement though. I must confess I'm not the strongest when it comes to options and I still consider it outside my circle of competence.
    Sep 27, 2011. 11:27 AM | 1 Like Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Thank you, untrusting investor and TAS. I'm glad you both got some value out of it. We hope to follow up with another article in the not-too-distant future that's even better in my eyes.
    Sep 25, 2011. 11:31 PM | 1 Like Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Hester,

    What you're saying is true. The problem is, you don't get assets this cheap unless there's all that associated pessimism. Waiting for the all the kinks to be ironed out, it'll be tough to get in for these prices. The train will have pulled out of the station without you.

    At least you know the sentiments for Japan can't get much worse, which can't be said for many other markets out there. As the companies keep plugging along adding money to the balance sheet every year, eventually something has to give. It's like gravity: it can be resisted but not ignored indefinitely.
    Sep 25, 2011. 11:29 PM | 1 Like Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Thanks, king707.

    The language barrier preventing thorough qualitative analysis is a little tough to swallow for a deep value investor, but our strategy is to buy a basket and not over-concentrate on any one idea. By keeping our position sizing small, we're trying to be the casino, not the player.
    Sep 25, 2011. 07:31 PM | 1 Like Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Maybe tulips for both 4x and flat? :)
    Jun 1, 2013. 07:50 AM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Indeed, rubicon59.

    idkmybffjill-- they weren't nearly as cheap 5-10 years ago. Many of those companies added a lot of book value in that prevailing time period, while the prices were languishing. Like fighting gravity, that disparity can exist for only so long. :)
    Mar 27, 2013. 11:24 AM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Rubicon59-- you might like this mini-study:
    http://seekingalpha.co...
    Sep 28, 2012. 04:08 PM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Does the Japanese government missing a debt payment mean that business completely stops in Japan? Does it mean refrigerators are no longer produced and exported, sugar refined and sold to coffee shops? I'm skeptical. Life goes on after defaults.

    It seems like that kind of "upheaval" is largely already priced in to what we've been buying-- maybe it's why it's so cheap? Sure, what we own could always get quotational cheaper, but it's hard to imagine it's so damn cheap already.

    The only caveat I would add is that many Japanese businesses own long term government debt as assets on their balance sheets. All along we severely discounted those assets just in case "the bug found its windshield" and those dropped dramatically in price.
    Aug 29, 2012. 06:46 PM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    That's correct, though other mechanical studies indicate that holding period doesn't matter as long as it's statistically cheap.
    Aug 3, 2012. 08:26 AM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    It highlights for me how arbitrary one year is for a time horizon. :)
    Aug 2, 2012. 11:20 PM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    Looking from July 23, 2011 to July 23, 2012, I'm seeing the USD-Yen was basically flat?
    http://bit.ly/OLgk2n
    Aug 2, 2012. 08:30 AM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    USD. We don't worry too much about currency fluctuations, as there seem to be countervailing forces between currency and market movements.
    Aug 1, 2012. 03:44 AM | Likes Like |Link to Comment
  • Are Japanese Businesses Worth More Dead Than Alive? [View article]
    More like 8%-- there were a few buy outs at healthy premiums.
    Jul 30, 2012. 02:59 PM | Likes Like |Link to Comment
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