INVESTMENT STRATEGY RATIONALE

  Vision of a “New” Japan


 

An investor understandably expects -a superior return while limiting risks. To accomplish this mission, a clear definition of a strategy and rationale for this strategy is necessary.

Rigid government regulations and multi-layer distribution channels are softening as the "westernization" of Japan drives a fundamental changes. The "old order" of a manufacturing society is giving way to the "new order" of a service-oriented society.

Consequently, an unusual investment opportunity exists to reap significantly higher returns than in other major stock markets focusing on high-growth oriented companies that cater to a new Japanese consumer, who is recession-weary and price-conscious. Despite Japan's still sluggish consumer spending, retail warehouse formats, one-stop shopping in different discount stores, planned weekend shopping in bulk, 24-hour shopping, and "take-out" food - practices unheard of a few short years ago - are becoming customary.

Searching for stocks which are innovating and catering to the new Japanese consumer is clearly the correct strategy because many of these companies achieve a higher return on equity and higher profit margins nearly double those of old-style Japanese companies.

Certainly others recognize this opportunity; but Shiozumi Asset Management Co., Ltd. believes that an investor's superior return will be built only by a single-minded dedication to this strategy. It is not enough to have portfolio access to the Japanese market, but rather it requires a specialist's understanding of the rapid evolution of economic, political, social, and financial developments within Japan to fully exploit this strategy. As growth specialists, we believe that we are uniquely capable to exploit this strategy.

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