I recently wrapped up a 16-day adventure across Japan, marking my second extensive journey since bidding farewell to my iron rice bowl in March 2021.
The first big trip took me to Omaha for the Berkshire AGM, where I had the unforgettable experience of meeting my investing heroes, Warren Buffett and the late Charlie Munger. From there, I journeyed across the US, trekking through national parks like Red Rocks, Rocky Mountain, Yellowstone, and Grand Teton.
This time, I ventured to the less-trodden paths of Kyushu, Japan during cherry blossom season—a period when the world seems to converge in Japan, marveling at the spectacular blooms. I chose a quieter adventure, starting in Fukuoka and weaving through Beppu, and the enchanting Yakushima, before heading to Huis Ten Bosch and Nagasaki.
Eventually, I made my way to Kyoto and Tokyo, which were overwhelmingly crowded. Reflecting on my trip, I wish I had spent more time soaking in the serene beauty and unique culture of Kyushu.
Yakushima was particularly memorable, an island near Kagoshima famous for its wildlife and ancient cedar forests. These majestic cedars, some of the oldest trees in the world, grow steadily through centuries, unaffected by the transient storms and seasonal fluctuations.
This is Sennensugi, which means a thousand-year-old cedar tree even though it’s still young. Yakushima’s oldest tree (and the oldest tree in Japan) is Jōmon Sugi, which is estimated to be between 2,170 and 7,200 years old.
This resonates deeply with my investment strategy. Just as these enduring cedars are not swayed by the fleeting changes in their environment, I focus on “Steady Compounders”—companies with significant economic moats and consistent intrinsic value growth.
When friends learn about my extensive travels, they often ask, “What about your investments? Don’t you need to monitor them constantly?” What they usually mean about ”monitoring” isn’t analyzing quarterly business results, but rather obsessively tracking stock prices and consuming every tidbit of news to stay perpetually informed.
However, I liken such constant vigilance to setting up a camera in a forest to watch the trees grow, this approach isn’t just tedious—it’s unnecessary and potentially harmful, often prompting rash decisions.
Everyone invests to grow wealth, but understanding why you invest is crucial. For me, it serves to enrich my curiosity and intellect, rewards my eagerness to learn, and more importantly, grants me the freedom to live life on my terms and cherish moments with my loved ones.
Therefore, I don’t pursue obscure, unproven companies which require intensive monitoring. Instead, I look for Steady Compounders — firms with a significant economic moat that are growing their intrinsic value steadily.
Like the steady growth of Yakushima’s cedars, these firms don’t need constant oversight; they thrive over long periods through economic cycles, much as the cedars endure through seasonal changes. Investing in such companies gives me the freedom to explore the world, knowing my investments are growing steadily, mirroring the quiet, powerful ascent of those ancient trees.
While these stocks usually command a premium, today’s market is increasingly volatile, creating pockets of opportunities to purchase these quality stocks at fair or even undervalued prices every now and then.
Seizing such opportunities requires courage, which isn’t always easy. Falling stock prices can easily distort your perception of potential investment opportunities. However, thorough research conducted beforehand serves as a guiding star when the market begins to behave irrationally.
The challenge for most investors is not identifying opportunities, but maintaining the conviction to act on them despite market noise and emotional turmoil. It is important to remember that sound investment principles are rarely as thrilling as market speculations, but they are invariably more rewarding in the long run. It is the disciplined investor who looks beyond the noise to understand the fundamental strengths that can weather the storms of time.
Till next time,
Thomas
This is such a thoughtful and grounded post. Thanks for sharing your insights drawing from the lessons of nature. There are so many parallels we can see.