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I started writing an essay about the lessons learned running a paper portfolio these last 2 years, but I don’t think anyone reading this needs to hear more about the importance of Bayesian updating and the principles of value investing. I bored myself while writing it! Instead, I am just going to write about what’s been on my mind. If you don’t live here, you probably can’t understand how unbelievably rainy it has been this summer in Tokyo. In September we received nearl

Are you annoyed by investors who go on and on quoting Warren Buffett? Then you are probably not going to like this essay! Especially because it has not one, but two (!) Buffett stories about ham sandwiches. But I hope these are “deep cut” enough that you are not bored to tears. An Exceptional Ham and Cheese There is a story from Carol Loomis’ “Tap Dancing to Work” biography of Buffett. He has dinner with his friend Marshall Weinberg on a visit to New York in the 80s. Buff

A number of well-known investors extoll the benefits of investing in family-run businesses. I used to be favorably inclined as well. The large ownership stakes, long time horizons and conservative financing of family businesses align with my own goals of steady compounding with minimal risk of a blow-up. However, in reality, some of my worst returns have come from family-run companies. What gives? Evidence in Favor of the Family-run Company There is some evidence that famil

The Hosomichi strategy is constructivist. I aim to create value for employees and shareholders alike by advocating for best practices in both capital allocation and operations. In my experience, if a company continues to invest in a low-return business, it is bad for everyone. It is impossible to raise pay for workers if the customers are unwilling to pay much beyond the cost of raw materials, and naturally shareholder value is also impaired. While creating shared value can b

I try to play tennis a few days a week. I also watch lots of matches on YouTube. My favorite player to watch is Nick Kyrgios. If you don't know him, Kyrgios is an Australian player with one of the best serves in the game. His first serve averages 130mph, 10mph better than the average pro, while he barely slows down for the second serve at 124mph, exceeding peers by 25mph. He is also the poster child for unfulfilled potential. Despite his dominating serve and incredible skill