The KonichiValue 'Fortress Five': My Definitive Japan Portfolio
Why I'm swapping cheap stocks for Unkillable businesses
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. The opinions expressed here are my own and are not a recommendation to buy or sell any security. All investments involve risk, and I am not liable for any losses. Please do your own research before making any investment decisions. I may or may not hold a position in the securities discussed.
Friends and fellow investors,
It’s been a long time coming, but I have finally made a massive portfolio update!
This update comes after years of trying to grasp what makes Japan special…
My thesis is that:
For three decades, the investment world has gotten Japan wrong. They have relentlessly pitched “Cheap Japan,” armed with spreadsheets of low P/E ratios, only to be caught in one value trap after another.
They bought cheapness, not quality.
My mentor taught me that the foundation of real wealth is not buying a fair company at a wonderful price, but buying a wonderful company at a fair price. A wonderful company has an economic moat, a durable, competitor-killing advantage, that protects its profits and allows it to compound capital for decades.
The real opportunity in Japan, the one the headline-chasers are still missing, lies in the world-class operating companies that Japan cultivated while the world was busy calling it “lost.”
As it is my job to analyze stock data, I have created this fantastic quantitative screen of the 59 most interesting Japanese companies, which I have included for you to review alongside this analysis:
Before continuing, please understand the Pitrovski F-score, as I use it heavily in my evaluation.
But a screener is just a list of “what.” My job is to find the “why.”
After applying the KonichiValue framework, and incorporating the crucial filter of business model certainty, I have curated the ten best.
From those ten, I have selected five extraordinary “Fortresses”.
The KonichiValue Top 10
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