Audio Archives
Client Letters
OID Features Online
OID.com Exclusive
Features
Indexes:
Investors
Funds et al.
Companies &
Investments
Contact Us
About Your
User Name
& Password
Free Reprint
Online Excerpts
Investors in
Our Latest Edition
Companies &
Investments in
Our Latest Edition
About OID
Subscribe
Online Advertising
Online Classifieds
Employment
Opportunities
Portfolio Reports
Home Page
CUNDILL INVESTMENT CONFERENCE
PETER CUNDILL, SETH KLARMAN ET AL.
(continued from preceding page)
Enter "The Seven-Year Itch" - aka round and round we go.
Cundill: But the whole point of this story is "The Seven-Year Itch". Today, seven years later, Tachihi still has its land.... And its shares are back down to ¥3,100. So they've gone from ¥2,500 to ¥4,600 and all the way up to ¥12,800 and back again.
There's still no debt. And that, interestingly enough, is one of the characteristics of many Japanese companies today. The company still makes money. And it's even a better bargain than when we first bought it because there's a monorail going in that will connect it to the rail system into Tokyo. Also, at least in theory, the zoning is close to being approved. And they're looking for a partner to develop it. So I'm sure that there's ¥13,000 per share of value there. And we own a little....
TODAY, IT'S THE JAPANESE LOOKING FOR ANSWERS.
While Japan thrived, the U.S. dealt with a crisis.
Cundill: Returning to the "Seven-Year Itch" theme, in 1989, the Japanese share market was up near 40,000. At that time, a piece of land in central Tokyo not much larger than a handkerchief was worth $1 million.
By contrast, in 1990, the United States was suffering its savings and loan crisis. There weren't a lot of bargains there then, but there was a fair amount of distressed debt. It was clearly a ... time of disquiet and discontent in America. But Americans really do deal most effectively with a real crisis - not small, unperceived ones. And they dealt with it.
Japan seemed to be in the saddle as U.S. sun was setting.
Cundill: In Japan, on the other hand, there was a paper published by [Akio] Morita, the then chairman of Sony, and a right-wing Japanese parliamentarian entitled "The Japan That Can Say No".
It's really very interesting reading because it's just like reading a research analyst's seven-year old memorandum on an issue in light of subsequent circumstances. It said, in effect, "We are so good at computer chips, etc. that we determine America's destiny - because our chips are the only ones that will work in American rockets."
So much for Japanese chips. The Americans seem to have done all right. They won a war. And they've done a whole lot of other stuff.
Today, the U.S. is the only superpower in town....
Cundill: And today? Here we are seven years later. America's at the height of its powers - in terms of its imperial power, its economic power, etc. I'm not sure it gets much better than this.
Prince Bandar, Saudi ambassador to the U.S. and probably the ultimate arbitrator between the Arab world and the U.S., spoke at an event of the Aspen Institute where he said, "America is the only game in town."
But in fairness, Americans don't get arrogant really. I'm married to one. My two stepchildren are American. I've watched them at work. And they just assume that if they get into trouble, American paratroopers will come in and rescue 'em.... I think that [can-do attitude, only without arrogance] is inherent in the American psyche.
Page 5 of 12
|
(Return to Table of Contents) |
(continue to the next page) |
©Copyright 1996-2008 Outstanding Investor Digest, Inc. All rights reserved.
295 Greenwich St., Box 282, New York, NY 10007 (212) 925-3885