Wednesday, 30 January 2013

A Value Investing World Interview With Tim McElvaine

In an October, 2012 interview, Tim McElvaine discusses his approach to investing in Japan.  Since the country’s famous bubble and bust, few investors have been tempted to commit capital there.  Macroeconomic challenges that include a radically high level of debt-to-GDP and the chronic threat of deflation have been enough to scare most stock pickers away.  The simple fact that few other North American (or European) investors are interested in the Japanese market, however, may open up opportunities.  It is not impossible, after all, for individual companies to thrive despite economic troubles in their home nation.

The interview offers ground-level insights into the obstacles in Japan that include long-standing corporate governance issues, entrenched management that ignore the best interests of shareholders, poor capital allocation, questionable stewardship of the capital structure, and a range of cultural differences.  

The blog is christened North American Value Investing for these very reasons.  This is not to romanticize US and Canadian markets, which have suffered from many of the same troubles.  However, the problems are not as entrenched in North America, and cultural discrepancies only affect people unfamiliar with foreign customs.  However, brave investors may find opportunities in Japan despite all of the drawbacks.

Here is a Profile of  Tim McElvaine


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