Japan financial crisis.

There was a podcast I just listened to from the investors podcast and it was a commodity trader from Texas who is a commodity trader in Chicago and owns a hedge fund. I cannot find the guys name and cannot find the website he has. Can anyone please tell me?! It was one of the earlier episodes. Episode 33 but it's gone now? Can someone help. Thank you

Comments

  • It was episode 33 but for some reason it is not listed on their site anymore.. can someone please tell me just the name and the website of the person it is driving me nuts.
  • I just did a search for Japan and found this post talking about the guy. Maybe they took it down as it is politically charged when you short another country. Japan seems the same as before.

    https://forums.theinvestorspodcast.com/discussion/comment/12602/#Comment_12602
  • I think as for my latest reading about Japan's economy, It is said that despite of Fed rate rise, Bank of Japan stays on hold.
  • I am listening to that one right now and I downloaded it from the iTunes Podcast feed for TIP. Not sure if that's an option for you or not.
  • So the guy was arrested, if you look at the link above. Gman put a link to an article about it. He is being charged in relation to fraud and stock manipulation. That is probably why they took it down.
  • Wow, that's depressing. He's been my favorite guest on TIP so far (mind you I've only been through 33 episodes). Was hoping he'd be using his considerable knowledge for good.
  • Hi All,

    Ghazel is referring to this tread - https://forums.theinvestorspodcast.com/discussion/comment/12602/#Comment_12602

    I too was blown away by Tres, first for good reasons then for bad. If you read a lot of psychology and behavioral finance in particular you may get this gnawing feeling that overconfidence bias is something Tres has/had in spades...

    I could not unwind that trade he was talking about and for the record since then I have been trawling Japanese net nets and investing a large part of my portfolio in Japan. It may well all blow up but having dug into markets facing currency crisis and and their subsequent returns, historically, time has healed the majority of such crisis. And with all things macro, when they come to fruition is a big issue. Being right (but early) vs being wrong look the same with regard to portfolio returns.... You have to wear irrational drawdowns investing in equities so if you step out before getting the irrational upside you're mathematically doomed to under perform....

    Japan may will be in macro economic dire straits, but while their CAPE ratio is not outlandish, price/book low and companies trading below a conservative liquidation value can be found the downside seems reasonably well protected...

    Kind regards,
    G


  • Hey Gman,

    My wife is Japanese and I have been there 3 times. She just came back from a visit to see her family.

    If I remember correctly Tres was talking about borrowing Japanese currency to buy gold, mortgages or other assets like stock and then paying it off in US dollars.

    The only Japanese stock I own Mazda and that is not great, but does offer me a little diversity and dividend. I don't particularly recommend it however. Only been doing this myself a year but my equity is beating the index so I am feeling good so far. A little over exposed to Canadian economy and lack a good bio/pharma stock to have a real diverse industry mix. Looked at Medtronics on the drop but didn't pull the trigger also got some AGT in my wifes portfolio I started for her.

    What I have observed from the Japanese stocks I have looked at that they are all mostly fairly valued and mostly well run however the lack of growth in the local economy means that the market is mostly flat or sinking. The companies would rely on trends, innovation, targeting Indian, Chinese and other international consumers or internal growth measures to return value. A lot of the companies I have seen seem to be pretty mature. There also seems to be a fair amount of foreign ownership mostly China and US owning or buying a lot of these Japanese companies. Seems like the US and Chinese owners like to leverage the companies a lot more than Japanese management. I think a lot of the Japanese owners are older generations.

    I myself do not invest in too many pure net nets however I have picked up a few companies with really low acquirers multiple recently. I mostly stick to Canada stock with international exposure and US equities but I would be interested to know your holding period and conversion rates on the ones that do return to fair value or get bought out if any have.

    I guess with net net's you want to make sure there is not too much negative cash flow or declining revenue over longer periods or your book value goes down.

    I myself would look at southeast Asia, India, Brazil and Russia for international investment for real growth or value instead of shorting a currency or economy to purchase assets.


    To me living in Canada, land and property value in Japan seems reasonable as well. I would like to have a little place in the countryside. It is a really gorgeous country and culture.
  • Hi Ghazel,

    Sounds like you are intimately familiar with the land of the rising sun :smile:

    "but I would be interested to know your holding period and conversion rates on the ones that do return to fair value or get bought out if any have."

    1. hold 12 months - if still a "buy" I hold for another 12 months.... after 24 months sell irrespective - this is important for Japanese companies in particular because you can find some really cheap companies that stay cheap for years and years and don't even trade at the NCAV.....

    2. if NCAV is breached within 12 months I set a trailing stop limit order based on the volatility and let it run... when it falls and my trailing limit is breached it will sell assuming my offset limit has been appropriately set and their is enough liquidity - not such certainly with a microcap stock!

    only 6 months so conversion rates don't mean much. but all 7 of my Japanese holdings are up.. one is up 115% and has breached NCAV... another is getting close to NCAV and the other still have a fair distance to get there... I'll give them time....

    "I guess with net net's you want to make sure there is not too much negative cash flow or declining revenue over longer periods or your book value goes down."

    I look for net nets where the NCAV is rising or at least not falling drastically. I don't really care about negative cash flow in say, the last year or so - its hard to be too discerning, these are some seriously bad companies to trade at such valuations...

    "I myself would look at southeast Asia, India, Brazil and Russia for international investment for real growth or value instead of shorting a currency or economy to purchase assets. "

    I think it is very hard to invest in individual picks in less developed countries - the level of corruption makes it so hard to know if the financial statements you look at are real. Plus with India they have idiosyncratic accounting treatment for some industries which you really need to know.... on the whole the risk of eating a permanent capital loss on a stock seems unreasonably high to me. If you are on the ground I think their could be massive opportunities - but from behind a screen that is too hard for me I think.

    There are some episodes of the "Value Investing" podcast where Indian based investors discuss the issues around fraud and accounting convention which maybe useful to you.

    Kind regards,
    G

  • Thank you for all of your insight! It is too bad he got arrested though.
Sign In or Register to comment.