13 Questions for Fidelity Japan’s Price

Which
Sector
Shows
the
Biggest
Promise
in
2023?

In
Japan,
I
would
say
that
the
technology
sector
holds
a
lot
of
promise.
There
are
many
globally
competitive
companies
in
semiconductor
equipment
and
materials
that
are
trading
on
compelling
valuations
as
we
approach
the
trough
of
the
cycle.
The
sector
has
gone
through
a
huge
inventory
correction
over
the
past
year
or
so
and
new
drivers
such
as
generative
AI
are
emerging.
The
other
area
of
the
market
that
I
would
highlight
is
the
mid/small
cap
growth
space,
an
often-overlooked
segment
that
is
trading
on
cheap
valuations.

What’s
the
Biggest
Economic
Risk
Today?

In
my
view
the
biggest
economic
risks
are
still
around
inflation
and
how
interest
rates
can
impact
market
valuations
and
levels.

Describe
Your
Investment
Strategy

I
follow
a
bottom-up
stock
selection
approach,
with
the
aim
of
identifying
companies
where
the
market
is
underestimating
or
mispricing
future
growth,
and
unearthing
companies
at
an
early
stage
of
their
development.
This
means
that
I
typically
find
more
opportunities
among
smaller
and
medium-sized
companies,
where
lower
levels
of
analyst
coverage
provide
greater
scope
for
mispricing
and
the
opportunity
to
discover
hidden
investment
pearls.
Ultimately,
I
am
looking
for
quality
businesses
that
can
deliver
long-term
growth.

Which
Investor(s)
Do
You
Admire?

The
investors
I
admire
are
those
who
cast
a
wide
net,
operate
in
neglected
areas
of
the
market
and
turn
over
a
lot
of
stones
to
find
hidden
gems.
I
certainly
look
up
to
talented
investors
outside
of
Fidelity,
but
Peter
Lynch
and
Joel
Tillinghast
stick
out.

Name
Your
Favourite
‘Forever
Investment’

I
don’t
think
that
there
are
any
real
forever
stocks.
The
one
name
that
comes
closest
though
would
be
Keyence,
a
factory-automation
enabler
with
a
unique
consulting
business
model
that
creates
its
own
markets
and
executes
on
a
global
scale.

What
Would
You
Never
Invest
In? 

I
would
have
to
say
companies
with
poor
governance
or
an
unwarranted
level
of
hubris –
basically
factors
that
could
negatively
impact
the
alpha
potential
of
an
investment.

Growth
or
Value?

While
we
have
seen
a
strong
value
market
over
the
past
two
years
or
so,
the
valuations
of
growth
stocks,
particularly
mid/small
caps,
have
come
down
to
value
levels
and
I
don’t
see
this
dichotomy
continuing.
If
the
view
that
long-term
rates
have
peaked
gains
traction,
this
would
help
to
put
a
floor
under
growth
stocks,
and
I
would
expect
some
of
the
names
that
performed
poorly
in
2022
to
come
back
quite
strongly.

House
or
Pension?

If
I
had
to
choose
one,
it
would
be
a
house
given
the
importance
of
shelter
and
security.
And
prices
are
more
reasonable
in
Tokyo
than
in
London.

Crypto:
Brilliant
or
Bad?

I
don’t
have
a
particularly
strong
view
at
this
point,
but
it’s
certainly
an
area
to
watch
and
I
will
be
keeping
an
eye
on
new
and
pre-IPO
companies
that
emerge
in
the
space.

What
Can
be
Done
to
Improve
Diversity
in
Fund
Management?

In
Japan,
the
job-for-life
model
has
typically
seen
university
students
go
straight
into
and
stay
at
blue
chip
companies.
I
think
that
the
fund
management
industry
can
certainly
do
more
to
reach
out
and
attract
a
wider
range
of
graduates
by
explaining
the
concepts
of
research
and
analysis
and
the
intellectual
fulfilment
a
career
in
investments
can
provide.

I
work
in
Fidelity’s
Tokyo
office,
where
the
investment
team
is
well
represented
across
nationalities,
languages
and
gender.
A
diversity
of
backgrounds
and
views
is
really
something
to
be
promoted.

Have
you
Ever
Engaged
With
a
Company
and
Been
Particularly
Proud
(or
Disappointed)
of
the
Outcome?

The
work
that
we
do
in
conjunction
our
local
engagement
team
can
be
very
satisfying,
particularly
with
smaller
companies
where
lower
levels
of
disclosure
can
detract
from
their
sustainability
ratings.
Implementation
at
smaller
and
owner-led
companies
can
be
very
quick,
and
its
rewarding
to
see
our
engagements
contribute
to
positive
change
over
a
relatively
short
period
of
time.

By
working
closely
with
our
engagement
team,
we
are
able
to
identify
companies
that
are
implementing
real
change
and
moving
up
the
governance
scale.
As
these
companies
improve
disclosure,
ESG
ratings
should
catch
up
and
the
market
should
adjust
valuations
accordingly.
For
investors,
this
creates
an
opportunity
to
benefit
from
the
adjustment.

What’s
the
Best
Advice
You’ve
Ever
Been
Given?

Something
that
long-standing
portfolio
managers
at
Fidelity
have
emphasised
is
to
take
advantage
of
the
opportunities
that
the
market
throws
at
you,
especially
during
corrections.
Capitalising
on
those
type
of
events
can
generate
significant
upside.
Also,
the
importance
of
a
strong
sell
discipline
and
locking
in
performance
when
you
are
right
on
a
stock.

What
Would
You
be
if
You
Weren’t
a
Fund
Manager?

I
would
say
that
journalism
would
probably
be
my
second
choice
after
fund
management.
There
are
similarities
between
the
stock
market
and
the
news
cycle
in
that
both
require
a
combination
of
historical
context
and
analysis
of
daily
changes
and
events.

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