The UK market appears statistically cheap, but its weak governance framework creates risks for minority shareholders. Acquirers often use "rollover options" as a loophole to force through undervalued bids, as regulators don't deem them coercive.
The easy money in large-cap Japanese activism is made. The next wave of opportunity is in smaller, sub-billion-dollar companies based outside Tokyo. These firms are slower to adopt corporate governance reforms, leaving them undervalued and ripe for engagement.
Both the host and guest agree that writing is a powerful tool for refining investment ideas. The process forces clarity and exposes unanswered questions, a discipline Warren Buffett also advocates. If you can't cogently explain your thesis on paper, it's likely flawed.
The proliferation of investing blogs has led to intense focus on US stocks. An analysis of popular sites showed 85% of ideas were US-based, with none from Australia or Japan. This saturation creates an information arbitrage opportunity for investors exploring less-covered international markets.
The HUMM Group board delayed disclosing a superior third-party takeover bid until after an activist challenge. This strategic timing served to "cleanse" the chairman of material non-public information, legally permitting him to immediately buy more shares and entrench his position.
During the Chairman's take-private bid for HUMM Group, the board's failure to secure a standstill agreement was a critical error. This allowed the Chairman to perform due diligence and then, after his bid fell apart, buy more shares to increase his control, disadvantaging other shareholders.
Investor Jeremy Raper stopped his popular blog because writing for a wide audience pushed him away from his profitable niche in less liquid, small/mid-cap value stocks. The need for actionable ideas for subscribers began to negatively influence his core investment process.
When investing in markets with potential governance hurdles, like regional Japan, the "deep value" principle is key. Purchasing assets at a fraction of book value creates a margin of safety. Even if activism takes longer or yields less, the low entry price can still generate an acceptable return while risking no capital.