What off piste skiing teaches us about Japanese small & mid cap equities
A recent half-term trip to Meribel got me thinking about the unlikely links between skiing & Japanese equities.
Case in point was the journey made from Col de la Loze (altitude 2,305m) to Brides-Les-Bains (600m), an almost entirely unpisted run only accessible when there has been a surfeit of snow (see map).
There were 4 of us: myself, my eldest son Max (in blue), my niece Sophie (in pink) & our guide Bastien (in black).
It was a stunning way to spend 2 hours: alone, on virgin snow, in almost complete silence, with little by way of signpost.
Naturally we relied heavily on our guide, Bastien, who was in his 21st ski season in the 3 valleys & knew the terrain inside out. Without him we would not have contemplated the route, let alone skiing to an altitude which typically sees horses grazing ‘on piste’.
It struck me there are distinct similarities between the Loze to Brides run & investing in Japanese small & mid cap equities.
For example the bulk of small & mid cap Japanese stocks have limited to no analyst coverage, with websites & accompanying documents often only in Japanese. Coupled with a dizzying array of different businesses it dictates investors, more often than not, are firmly off piste, & often deep in the woods.
Whilst the experience can be phenomenal, it also carries risks. Put another way: you need a Bastien, someone who knows the terrain, knows where to invest & when, & what the attendant risks are.
For those reading this article who may be considering a venture into Japan’s wild & beautiful small & mid cap outback, please get in touch. The Storm Research team, with almost half a century of experience, would be happy to be your guide.