Systematic value investing may be key to outperformance

ON JAPAN

ERNST GLANZMANN, portfolio manager, Japanese equities, at Swiss & Global Asset Management on Japan

Andersen’s fairy-tale The Ugly Duckling is an excellent allegory for successful stock investing in Japan. The story is about a large and ugly duckling that crept forth in a duck’s nest. Ultimately, the duckling found out it was a white swan, and the most beautiful of all of them. The essence of the tale is the conversion of something superficially unappealing into something pleasing – something that measures up to the highest-quality standards. Have you ever wondered why one should own a great wealth of inferior businesses that have generated an average return on equity of less than 5...