Would you sell Lindsell Train Japanese?

BananaRepublic

aroominyork said:

TBC/Linton, was my final para not clear? It still meets my needs and I would buy more while it is cheap. I am asking sellers why they would sell.

I think Linton gave you a very infirmative answer, even if not a direct answer to the question. A lot of people will sell based on short term thinking and lack of analysis, better known as panicking. Or they need the money. They might also sell because although they see a possible upturn in that fund, they think other funds/sectors offer better prospects over the next year or two. IMO we have more trouble ahead and it will be six months for vaccinations to have a significant benefit, and a year for leisure etc to start a proper recovery. Just my opinion though. 

bowlhead99

AnotherJoe said:

Why would you buy, specifically, a Japanese fund (rather than why this exact one)? Do you also hold S Korean, German, China ,  Sweden, US, Canada etc etc funds?

Japan's the second-largest equity market in the world and has quite a different industry mix to (e.g) US and UK, as well as an stockmarket and economy which has behaved differently from other parts of developed Asia and the West over the last three or four decades. So a common technique for regional diversification is to consider Japan separately from developed APAC and UK / Europe/ North America.  With 'stuff' being more globalised these days there is a bit of a shift towards people looking globally across industry sectors rather than just trying to take exposure to regional hubs by throwing money at the separate stockmarkets - though at the mid and smallcap level the companies have more exposure to local factors.

I don't personally have a largecap Japan fund, but have a smallcap one while getting mid and largecap exposure from global funds.

Thrugelmir

aroominyork said:

I think that's apples and pears, Thrug. I was just trying to see if anyone would justify ditching a fund after six months' underperformance. 

You are buying into LT's philosophy.  As a consequence they may well over/under perform against the wider market. With concentrated portfolio holdings that's the nature of the beast. If you are concerned after just 6 months buy a tracker.  

What's changed in your view since you originally bought the investment? I assume that you didn't just buy it on a whim. Every investment has bull and bear points. 

BananaRepublic

Thrugelmir said:

aroominyork said:

I think that's apples and pears, Thrug. I was just trying to see if anyone would justify ditching a fund after six months' underperformance. 

You are buying into LT's philosophy.  As a consequence they may well over/under perform against the wider market. With concentrated portfolio holdings that's the nature of the beast. If you are concerned after just 6 months buy a tracker.  

What's changed in your view since you originally bought the investment? I assume that you didn't just buy it on a whim. Every investment has bull and bear points. 

You might want to (re)read the last paragraph of the original post. 🙂

Thrugelmir

BananaRepublic said:

Thrugelmir said:

aroominyork said:

I think that's apples and pears, Thrug. I was just trying to see if anyone would justify ditching a fund after six months' underperformance. 

You are buying into LT's philosophy.  As a consequence they may well over/under perform against the wider market. With concentrated portfolio holdings that's the nature of the beast. If you are concerned after just 6 months buy a tracker.  

What's changed in your view since you originally bought the investment? I assume that you didn't just buy it on a whim. Every investment has bull and bear points. 

You might want to (re)read the last paragraph of the original post. 🙂

Perhaps trackers are the solution. 

csgohan4

bowlhead99 said:

AnotherJoe said:

Why would you buy, specifically, a Japanese fund (rather than why this exact one)? Do you also hold S Korean, German, China ,  Sweden, US, Canada etc etc funds?

Japan's the second-largest equity market in the world and has quite a different industry mix to (e.g) US and UK, as well as an stockmarket and economy which has behaved differently from other parts of developed Asia and the West over the last three or four decades. So a common technique for regional diversification is to consider Japan separately from developed APAC and UK / Europe/ North America.  With 'stuff' being more globalised these days there is a bit of a shift towards people looking globally across industry sectors rather than just trying to take exposure to regional hubs by throwing money at the separate stockmarkets - though at the mid and smallcap level the companies have more exposure to local factors.

I don't personally have a largecap Japan fund, but have a smallcap one while getting mid and largecap exposure from global funds.

Welcome back BH,

I have purposely avoid Japan in my EM funds, I have gone with a pacific ex japan fun due to the long term out look of Japan, they have recently injected more money into their economy and it may seem their economy is growing 5% this quarter, but I remain unconvinced personally as a long term investor.

If anything I have more weighting to China and have bolstered this with a China fund as well. 

But personal preference. 

bowlhead99

csgohan4 said:

bowlhead99 said:

AnotherJoe said:

Why would you buy, specifically, a Japanese fund (rather than why this exact one)? Do you also hold S Korean, German, China ,  Sweden, US, Canada etc etc funds?

Japan's the second-largest equity market in the world and has quite a different industry mix to (e.g) US and UK, as well as an stockmarket and economy which has behaved differently from other parts of developed Asia and the West over the last three or four decades. So a common technique for regional diversification is to consider Japan separately from developed APAC and UK / Europe/ North America.  With 'stuff' being more globalised these days there is a bit of a shift towards people looking globally across industry sectors rather than just trying to take exposure to regional hubs by throwing money at the separate stockmarkets - though at the mid and smallcap level the companies have more exposure to local factors.

I don't personally have a largecap Japan fund, but have a smallcap one while getting mid and largecap exposure from global funds.

I have purposely avoid Japan in my EM funds, 

It would make sense to avoid it for an EM (emerging market) allocation, as it is a well-developed stock market, having once been the largest in the developed world and now #2. Its market doesn't display 'emerging' characteristics such as lack of transparency, limited information, high political risk, etc, though companies there will make sales to consumers and businesses in emerging economies, just like some UK ones do.

I have gone with a pacific ex japan fun due to the long term out look of Japan,

As I mentioned in the earlier post, the economy and stockmarket of Japan has behaved differently from the other developed asia-pacific markets such as Hong Kong, Korea, Australia, Singapore and from US/ UK / Europe in recent decades and that's why the pacific market funds tend to have an ex-Japan option, treating Japan as a world region on its own.

But the fact that developed asia ex-Japan exists as a product is generally because people will consider the two parts separate, not because they are going to just buy one and not the other. All regions have their positives and negatives, but it's a proper advanced economy - and seems much too early to shun it in fear of a 'demographic time bomb' or whatever other negative sentiment is flavour of the month.

I remain unconvinced personally as a long term investor

If you just pick the three biggest listed companies, Sony, Softbank and Toyota there is over a third of a trillon dollars of market cap giving exposure to leaders in leisure/consumer products/media, telecoms and technology, and auto manufacturing prowess. While Tesla may have overtaken the latter in market cap, Toyota and Sony are on undemanding price/earnings multiples of 12-15.

You may think that making Camrys and Priuses and RAV4s etc is a dead end industry because someone will eventually do personal transportation cheaper and better; in which case, there are plenty of other companies to choose instead - in business services, information, pharma and so on. The economy as a whole is unlikely to completely founder, so I don't think you can really rule out an entire $4-5 trillion of market cap due to 'long term outlook'.  There is plenty for a 'long term investor' to get their teeth into.

If anything I have more weighting to China and have bolstered this with a China fund as well. 

You would expect to have more China than Japan in an emerging markets allocation as mentioned, as Japan isn't an emerging market. A report this week suggested China's GDP per capita would be 70th of about 200 countries by 2025 (so is growing at pace) and they have a hell of a lot of people so total GDP is enormous. Unfortunately much of that GDP can't be tapped into by foreign investors (or even domestic investors, much of it being state-owned) so the stock market capitalisation within the global FTSE or MSCI indexes is low, and if you used an index fund to access their markets your holdings would heavily weighted to a few major companies.

But personal preference. 

Much of investing is about opinion and one person may weight a sector or region higher than another would, but I think 'avoid entirely' is going to be overdoing it for most regions and sectors. So while the article mentioned by OP referenced the author's own experience of doggedly holding on to a Japan fund for a 'lost decade' or two before eventually giving up on it more than fifteen years ago (so missing the returns available over the last decade), I don't think that it's a country that's guaranteed to be a terrible place for one's money.

csgohan4

bowlhead99 said:

csgohan4 said:

bowlhead99 said:

AnotherJoe said:

Why would you buy, specifically, a Japanese fund (rather than why this exact one)? Do you also hold S Korean, German, China ,  Sweden, US, Canada etc etc funds?

Japan's the second-largest equity market in the world and has quite a different industry mix to (e.g) US and UK, as well as an stockmarket and economy which has behaved differently from other parts of developed Asia and the West over the last three or four decades. So a common technique for regional diversification is to consider Japan separately from developed APAC and UK / Europe/ North America.  With 'stuff' being more globalised these days there is a bit of a shift towards people looking globally across industry sectors rather than just trying to take exposure to regional hubs by throwing money at the separate stockmarkets - though at the mid and smallcap level the companies have more exposure to local factors.

I don't personally have a largecap Japan fund, but have a smallcap one while getting mid and largecap exposure from global funds.

I have purposely avoid Japan in my EM funds, 

It would make sense to avoid it for an EM (emerging market) allocation, as it is a well-developed stock market, having once been the largest in the developed world and now #2. Its market doesn't display 'emerging' characteristics such as lack of transparency, limited information, high political risk, etc, though companies there will make sales to consumers and businesses in emerging economies, just like some UK ones do.

I have gone with a pacific ex japan fun due to the long term out look of Japan,

As I mentioned in the earlier post, the economy and stockmarket of Japan has behaved differently from the other developed asia-pacific markets such as Hong Kong, Korea, Australia, Singapore and from US/ UK / Europe in recent decades and that's why the pacific market funds tend to have an ex-Japan option, treating Japan as a world region on its own.

But the fact that developed asia ex-Japan exists as a product is generally because people will consider the two parts separate, not because they are going to just buy one and not the other. All regions have their positives and negatives, but it's a proper advanced economy - and seems much too early to shun it in fear of a 'demographic time bomb' or whatever other negative sentiment is flavour of the month.

I remain unconvinced personally as a long term investor

If you just pick the three biggest listed companies, Sony, Softbank and Toyota there is over a third of a trillon dollars of market cap giving exposure to leaders in leisure/consumer products/media, telecoms and technology, and auto manufacturing prowess. While Tesla may have overtaken the latter in market cap, Toyota and Sony are on undemanding price/earnings multiples of 12-15.

You may think that making Camrys and Priuses and RAV4s etc is a dead end industry because someone will eventually do personal transportation cheaper and better; in which case, there are plenty of other companies to choose instead - in business services, information, pharma and so on. The economy as a whole is unlikely to completely founder, so I don't think you can really rule out an entire $4-5 trillion of market cap due to 'long term outlook'.  There is plenty for a 'long term investor' to get their teeth into.

If anything I have more weighting to China and have bolstered this with a China fund as well. 

You would expect to have more China than Japan in an emerging markets allocation as mentioned, as Japan isn't an emerging market. A report this week suggested China's GDP per capita would be 70th of about 200 countries by 2025 (so is growing at pace) and they have a hell of a lot of people so total GDP is enormous. Unfortunately much of that GDP can't be tapped into by foreign investors (or even domestic investors, much of it being state-owned) so the stock market capitalisation within the global FTSE or MSCI indexes is low, and if you used an index fund to access their markets your holdings would heavily weighted to a few major companies.

But personal preference. 

Much of investing is about opinion and one person may weight a sector or region higher than another would, but I think 'avoid entirely' is going to be overdoing it for most regions and sectors. So while the article mentioned by OP referenced the author's own experience of doggedly holding on to a Japan fund for a 'lost decade' or two before eventually giving up on it more than fifteen years ago (so missing the returns available over the last decade), I don't think that it's a country that's guaranteed to be a terrible place for one's money.

Glad to have you back, missed your extensive well thought out posts. 

My EM  funds I suppose are more pacific ex japan rather rest of the world  per say. I deliberately excluded pure EM markets like Brazil, latin America e.t.c and focused on Asia for the time being due to long term growth concerns for mentioned countries.

Eventually I may decide on a Japan fund in time, but it is still a small proportion of my investments and rightly so to diversify and mitigate risks in some respect. With the bulk being in HMWO and other sectors. 

Old_Lifer

My first investment in Japan was in 1969 in  Save and Prosper Japan Growth Fund,   followed in 1971 by an investment in M & G Japan & General Fund.    I therefore find it odd that anyone should think of Japan as an Emerging Market.

Having been out of the Japanese market for a couple of decades ,  I invested in  Japan  ITs in  autumn 2012 and the Election at the end of the year saw Japan enter a  period of change.  There is now an increasing willingness to return value to shareholders and dividends are becoming more common.   Change doesn't happen overnight but is a gradual and ongoing thing.

Many Japanese companies are particularly good at embracing new technology and are for instance,  way ahead of us when it comes to the adoption of hydrogen power.