Shinya Deguchi_Star Magnolia

Allocators without Borders

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Maga

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Have you ever had mackerel (saba) sashimi? Many people don’t like mackerel because they are stinky and too “fishy”. But it is probably because they never had really fresh mackerel.

Even for sushi connoisseur, it is quite rare to taste rare mackerel. Mackerel decades very quickly as the enzyme within its intestines is extremely powerful. At the same time, its amino acid can turn into histamine very quickly. Histamine is poisonous.

As a result, most dishes uses salted, smoked or vinegar-marinade mackerel. It is simply very difficult to find fresh rare mackerel even in Japan.

Fukuoka is known for mackerel sashimi. It locates in the morthern part of Kyushu island and locals enjoy eating mackerel. This weekend, I visited my friend and enjoyed mackerel sashimi almost three times a day!

It is a lighly fatty and sweat meat. In Japanese we describe the texture of meat “kori-kori”. There is no good translation for this sizzle word, but closest translation is “firm and crunchy.” You can only enjoy this when you eat extremely fresh fish. It is among the top five sashimi that I ever tasted and it is available almost everywhere in the region.

Mackerel sashimi is like Constellation Software in early days. It’s a small cap software company in Canada that many people paid no attention. There are too many hairy and smelly Canadian companies that people got burnes before. It was a stock only locals and some weird believers knew… before its share went up 200x over the last 20 years. (26% CAGR, $60 bn market cap)

I want to find more mackerel sashimi investment.

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

When we construct a portfolio we try to find investment opportunities negatively correlated so that the overall portfolio’s volatility can be lower than simple weighted average of volatility. This is a positive sum.

The parfait I found in Itoshima during the weekend is one of such things. You can “never” imagine the combination of the ingredients of this parfait called “parfait-parfait” created by graphic artist-aka-patissier Kanae Shibata at Pinot Gris, a cafe. Granite of tomato and avocado is topped with fresh and light cream and amazake (rice wine) ice cream. It is covered by mulberry sauce. What makes this parfait very unique is its use of sansho (山椒/花椒), or Zanthoxylum bungeanum. It is a special spice used often for Szechwan cuisine. It is quite an opening experience to notice how the ensemble of random and weird flavors can actually make a perfect symphony.

This cozy cafe stands on a hill overlooking a small village surrounded by mountains. It is quite picturesque. You suddenly feel that you are in the middle of Toscana.

When you construct a portfolio, you shouldn’t rely too much on figures. Sometimes figures can mislead you. Correlation is unpredictable and sometimes unmeasurable - during a crisis time it goes to 1. You need to have imagination and deep understanding of underlying managers and assets in order to achieve the positive sum. It is often an art rather than science. There is no recipe for Kanae’s creation. She made this out of inspiration. Portfolio management perhaps requires such inspiration.

Pinot Gris
1052 Shimasakurai, Itoshima, Fukuoka 819-1304, Japan
https://t.co/47cIsIdmoD

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Serious?

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

What is the best investment made by Charlie Munger?

It’s people… including Warren Buffett. Without Munger, Buffett could be one of many successful hedge fund managers that history forgets.

We also invest in people. And, that’s all we do.

I’m happy to share this article written by Persis Hoo who knew almost nothing about investing before she joined us in less than 2 yeaes ago. You can tell she is one of the best investments we ever made.

https://t.co/AWyY3kfCVH

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

World of Allocators is hosting the first official event in Singapore. On January 31, we are going to have an intellectually intriguing discussion with Prof. Steve Dimmock, Head of Finance Department of National University of Singapore. He has been publishing a lot of interesting research regarding endowment fund and financial misconduct over the last several years.

This is an inaugural in-person event for World of Allocators in Singapore, so it will be open to both institutional investors and family offices, free of charge.

<<Date & Time>>
January 31, 6-8pm

<<Agenda (TBC)>>
6:00-6:10 Registration
6:10-6:15 WOA Intro
6:15-6:30 Envy Global Presentation
6:30-7:30 Prof Dimmock's Sharing and Q&A
7:30-8:00 Networking

We will host another networking opportunity near the venue (cost will be shared by participants)

<<Location>>
Will be shared after the registration

<<Cost & Capacity & Eligibility>>
Free
Capacity is 50
Only institutional investors, family offices (some service providers may be invited)

If you are interested, please contact me.

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Every year, we have at least a few rising stars who join Next Gen Investors Endowment’s Z Club. Ryan Ang is clearly one of them. To be honest, they don’t need our helps as they know what they want, we can still support their journeys.

One of the advices we give to our members is to start their own blog. This helps them to expand their networks but could bring a dream job to them, however, very few starts.

I strongly advise readers of this message to follow Ryan’s blog and monitor his progress over years.

https://t.co/cvwqB9DHeB

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

It was the year of US Large Cap (up 24.3%)… actually, it was the year of the Magnificent Seven, which collectively represent 29% of S&P 500’s market cap. Magnificent 7 is up 93.6% this year. It’s almost impossible to beat this return if you invest outside of The Magnificent Seven.

The Magnificent Seven is now trading at 44.8x P/E. The most expensive stock is Tesla, trading at 80.2x, followed by Amazon at 79.2x. The cheapest stock is Alphabet at 26.8x.

S&P 500’s P/E is now 26.4x. It’s definitely not cheap. You may wonder if the Magnificent Seven is lifting the overall valuation. You are partially correct. S&P 493 (excluding the Magnificent Seven) is still trading at 23.5x.

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Why Japan looks like India?

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

How do you trust an investment manager?
Transparency is one of the key tools to establish a trust between us, but allocators shouldn’t expect trust blindly. Trust is always mutual. We must win trust from our investment managers that (1) we do not leak and (2) we do not self-profit from the disclosure.

If allocators trade on their own or compete on deals against investment managers, they shouldn’t expect the investment managers to disclose their secret recipe.

It’s a basic business principle. Trust is mutual. Trust must be won.

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Our neighbor’s rennovation is driving me nuts. In Shanghai, the contractors are allowed to start at 8am.

Well, we can still find a haven in Shanghai. This is a cafe next to le Comptoir de Pierre Gagnaire where I can sit outside and enjoy Shanghai winter’s cold but crisp air with a cup of hot Americano. They also have a proper fluffy croissant (different from So France in Singapore and it should be this way to enjoy croissant itself).

【Le Comptoir de Pierre Gagnaire】
★★★★☆ 4.4
¥1484/人
肇嘉浜路/中山医院 法国菜
天平路街道建国西路480号（建业里）
https://t.co/OtgDTMN9nG

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Bistro Sola is my favorite French restaurant in Shanghai. Why French in Shanghai you may ask. Well, you should come and try Motoya’s truly fine cuisine that you cannot find anywhere else but France and Japan (you know the quality of French in Japan is good).

It’s a bistro that provides the better than restaurant quality dishes with details. Motoya adds some Japanese accent to tranditional French, which make the dishes fun and unique. The way he combines fresh ingredients, especially seafood, is like a magic.

At many restaurants, you will be thrilled by the quality of the starter, but disappointed as menu proceeds. In many cases, main dishes in French cousines are a bit dull. In case of Bistro Sola, it’s opposite.

It is like a perfect Symphony No. 9. It starts with elegance and finshes with elevation. Every dish is special here.

【Bistro Sola】
★★★★☆ 4.0
¥586/人
肇嘉浜路/中山医院 法国菜
嘉善路510号
https://t.co/YgrYkdBDC4

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Alternative investing is no longer alternative.

However, back in 1990, alternative investing was really rare among institutional investors. In the early years when Yale started allocating capital to Absolute Return (aka hedge fund), their 14.5% allocation represented 1/3-1/4 of the total allocations among endowments.

That is what we call Unconventional Asset Allocation. Asset allocation is not simply following the hottest segment of the markets. Quite contrary, you need to allocate capital to the areas others don’t.

Continue Reading: https://t.co/5LEIygBt21

[秋野 ひろ / マンガ家 @16_akino]

コップがないときに使える、最高に雑なライフハック(1/3)

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

This is the question many people ask me. They are missing points. Investing is not just an extension of personal finance, but it could be a life long passion. Not having an opportunity doesn’t mean she has not gift to become an investor.

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Should poor students learn investing? Shouldn’t they learn how to earn money first? https://t.co/DABdghkhdw

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Smart, isn’t it?

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

A candidate we really wanted to hire for our Shanghai office sent these books after she declined the position. She found something else she felt so much passion to devote her youth. Although I was disappointed, I was also happy. I know our paths will cross again. Stay in touch.

[Shinya Deguchi_Star Magnolia @Deguchi_StarMag]

Very very important video to watch for those who wish to become portfolio managers one day (and for those who already are).

[Alix Pasquet @alixpasquet]

On April 11th, 2023, I spoke at the
@punchcardproj conference. The title of the presentation was "How to be a great analyst". Here is the full video https://t.co/kqhlDyTk4C. Thank you @jfbasili, Vishal Mishra &amp; Andrew Kahn for inviting me.