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A Lesson on Japanese Corporate Governance from Third Avenue
Investment Strategy | 3 Comments | Wed 21 Sep 2011
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To be able to learn a lesson without charge, from one of the greatest ever practitioners of their profession, is a chance none of us should pass up. Marty Whitman first bought Toyota Industries in Q2 2008. His investment journey with this holding has had some unexpected twists that are relevant to all who see apparent opportunity in Japan after years of neglect. After all, as Eleanor Roosevelt once said, "Learn from the mistake of others. You can't live long enough to make them all yourself."



Comments

1.
On 27/12/2011 11:24:12, Carolyn Matherly wrote:
Thank you for posting this history. I have read about TAVF's investment in Toyoda and wondered how it was working out.

2.
On 02/01/2012 17:20:46, VII wrote:
TAVF made the following comments about Toyota Industries in their most recent annual report (Oct.11):
"we have reduced our holding by nearly two thirds as our other core holdings appear to have more attractive growth prospects and common stock appreciation potential".
With the share price ending 2011 at Y2090 it would so far appear as if Toyota Industries has not been one of their greatest investments but they still have 4.5% of the fund invested in it.

3.
On 30/01/2012 22:44:16, VII wrote:

This from The Third Avenue Annual Report:

TOYOTA INDUSTRIES COMMON
Toyota Industries (“Industries’) is a diversified manufacturing company that produces automobiles, engines, air conditioning compressors, materials handling equipment (e.g., forklifts), textile machinery and logistics related equipment. The company also has a portfolio of
Japanese common stocks, the largest position in which is a 6.8% ownership stake in Toyota Motor. The decline in
Industries’ NAV since 2005 has been primarily driven by the falling stock price of Toyota Motor common, which accounts for approximately 50% of its estimated NAV. Toyota Motor’s business performance has been disappointing in recent years owing to operating losses
during the global recession in 2008-2009 and recent market share losses driven first by recall issues and more recently by production disruptions from the earthquake in Japan and floods in Thailand. As we have written in
previous letters, we do not believe that these issues have resulted in a permanent impairment to Industries common. Nevertheless, we have reduced our holding by nearly two-thirds, as our other core holdings appear to have more attractive growth prospects and common stock
appreciation potential. Industries remains extremely well financed and as of October 31, 2011, its shares traded at
about a 40% discount from our estimate of NAV

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