CHAPTER 10

International Value Investments

Searching for Value beyond Home Country Borders

See the investment world as an ocean and buy where you get the most value for your money.

—Sir John Templeton

Yogi Berra once presciently observed that “the future ain't what it used to be.” The future of international equities, both in perception and reality, has evolved tremendously over the past few decades. In many ways, investors seem to have adopted a more realistic view of international investments, shaped by a surge of information available on markets around the world, lower transaction costs, the bursting of several bubbles, emergence from several crises, and a realization that economies and markets are more interconnected than ever.

Most of the discussion in this book applies globally. However, sufficient peculiarities exist in local markets around the world to warrant closer examination of the rewards and pitfalls of cross border investing, the associated currency issues, the unique risks involved, and some practical ways in which investors can add international equities to their investment process.

In the interviews we conducted with leading investment managers around the globe, most of them expressed a view that the commonalities outweigh the differences. According to one of Japan's leading fund managers, Scott Callon, CEO of Ichigo Asset Management, “the fundamental principles of sound investing apply the same in Japan as they do anywhere else in the world.”1 The investment ...

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