We recently had the pleasure to engage in an exclusive Q&A on Japan with Michael Lindsell and Nick Train of Lindsell Train, one of the leading global investment firms and Japan specialists. Based in London, Lindsell Train was founded in 2000 by Michael and Nick and specializes in the management of UK, Japanese and global equity mandates for institutional clients.

Lindsell Train, which had assets under management of £3.1 billion at the end of September 2013, continues to be majority-owned by Michael and Nick. Michael has specialized in Japanese equity investing since early on in his investment career, which spans over thirty years.

This conversation was recorded in 2013.

The following transcript has been edited for space and clarity.

The Manual of Ideas: What is the right investor mindset when thinking about Japanese investment opportunities?

Nintendo is the largest video game company in the world, selling both handheld and console hardware and software in a closed system (i.e. Nintendo software is only available on Nintendo platforms). The closed system allows for a more interactive and immersive and entertaining experience which ultimately is what drives sales…

Michael Lindsell and Nick Train: We view Japanese investment opportunities in exactly the same way as any other investment opportunity, in that we are looking to identify exceptional companies. We find a good selection of such companies in Japan.

MOI: What is different about your investment mindset, or approach, after the equity market rally of the past year? Do you still see value in Japan and, if so, in which areas of the market or types of investments?

Lindsell Train: We have not changed our approach post the rally, continuing to concentrate on investing in exceptional companies for the long term. Of course with some strong price moves, the valuations of a number of our companies have moved up—but generally not to the extent that we are tempted to sell.

MOI: Would you briefly share your investment thesis for your most compelling current Japanese investment idea?

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