Week #35: The World’s Richest Janitor; Japan’s Bullish Narrative; Top 50 Most Valuable Companies on the World

Dumber than Tulip Bulbs? The Father of Miami Beach

Today at a Glance:

·      One Quote: Turning the Ordinary to Extraordinary

·       One New Narrative: Rising Sun Revival

·       One Top 50 List: From Silicon to Shanghai?

·       One Mania: Dumber than Tulip Bulbs?

·       One Father of Miami: Turning Miami's Swamps into Sunshine

One Quote

Ordinary to Extraordinary

“You don't need to have extraordinary effort to achieve extraordinary results. You just need to do the ordinary, everyday things exceptionally well.”

                                                                                                  -Warren Buffett

Buffett’s quote might sound too simplistic for overeducated Wall Street types.

But the little-known story of Ronald Read offers convincing proof that you don't need brilliance or extraordinary effort to achieve great investment success. You just need discipline in applying simple, time-tested principles.

Nothing about Read’s life or death was extraordinary. A retired gas station attendant and janitor in Vermont, he died in 2014 at 92.

So his neighbors were shocked when it turned out that his estate was worth $8 million.

Here’s how It happened.

First, Read was highly frugal. He drove second-hand cars, wore tattered coats, and cut his own firewood into his 90s.

Such intense thrift provided the capital that he compounded over time.

Second, Read lived a long life, living until the age of 92. Warren Buffett also recently celebrated his 92nd birthday. He generated over 90% of his fortune after his 60th birthday. The same was likely true of Read.

Such is the miracle of compound interest.

Finally, Read religiously invested 40% of his modest earnings. High savings, frugality and longevity compounded together to amass Read's unlikely fortune.

The lesson?

You may not want to live Read’s life of self-imposed, anonymous stoicism.

Still, Read's millions demonstrate that ordinary investors can achieve extraordinary results by mastering a few simple habits.

One New Narrative

Rising Sun Revival

I’ve been writing a lot about Japan lately.

It may be the most powerful narraitive in global investing over the coming decade. It’s also my single largest thematic position.

After decades of stagnation, corporate Japan is finally waking up. The Tokyo Stock Exchange's push for higher shareholder returns has sparked a flurry of commitments from major Japanese companies. Japanese firms are setting ambitious targets to boost profits, improve capital efficiency, and raise dividends.

Image source: Capital.com

Here are the three top developments.

First, over half of companies listed in Tokyo trade below book value . Companies like Nikon now aim to improve this ratio by pursuing new growth drivers.

Second, shareholders are demanding better governance and higher returns. For too long, Japanese firms neglected shareholder interests. Governance reforms, coupled with pressure from activists, are changing these attitudes. Firms are now competing to ramp up buybacks. Toyota and Honda are pioneers in this practice.

Finally, Japan was once a black box for shareholders. But now, investor relations teams readily engage. This reflects a fundamental realignment of priorities. .

The bottom line?

The exchange's push, shareholders' demands, and better engagement confirm that corporate Japan is embracing reform. Firms are fixing capital inefficiencies, boosting transparency, and prioritizing shareholder returns. This lays the groundwork for a long-awaited renaissance in shareholder returns.

Change is afoot in Japan. You should profit from it.

One Top 50 List

From Silicon to Shanghai

With a current market capitalization of over $26 trillion, the world's 50 most valuable public companies represent a significant concentration of global economic power and influence.

 Source: Visual Capitalist

As the graphic illustrates, three crucial takeaways emerge: 

First, America still dominates the upper echelons of the corporate world. Over half of the top 50 firms call the United States their home, collectively representing almost $14 trillion in market value. Though countries like China have rapidly expanded their corporate footprint, America's private sector remains unrivaled in scale and success. Firms like Apple, Microsoft, and Amazon drive tremendous innovation while creating immense shareholder wealth. 

Second, Big Tech reigns supreme as the most valuable industry sector. Information technology companies account for $9.3 trillion of the top 50's market capitalization - far outpacing any other sector. Tech giants like Apple, Microsoft, and Alphabet boast over $1 trillion in market caps, underlining the sector's immense growth and profitability.

Finally, the top 50 list reveals the growing global influence of Asian corporations. While American firms dominate, Chinese companies like Tencent and Alibaba represent a rising force, combining immense scale with rapid expansion. And Japan still boasts global leaders like Toyota and Sony. Asia's economic emergence is reshaping the corporate landscape.

The world's most valuable public companies remain concentrated in America, led by ascendant technology firms, even as Asian corporations steadily gain ground. This graphic provides a snapshot of the modern global economy - one increasingly defined by the unprecedented scale and wealth generation of today's corporate titans.

One Mania

From Fluff to Fortune

“They say good artists borrow and great artists steal. And Ty was the greatest bullsh-t artist around.”

                                                      -Former employee of Beenie Baby founder Ty Warner

The Beanie Bubble, which premiered on Apple TV+ on July 28, tells the story behind the Beanie Baby obsession that took off in the 1990s. It is based on the 2015 book The Great Beanie Baby Bubble. It follows the story of toy manufacturer turned billionaire Ty Warner and the Beanie Bubble craze.

In the late 1990s, a peculiar mania swept across America. Seemingly overnight, stuffed animals with cute names like Patti the Platypus and Splash the Whale became red-hot collectibles commanding eye-popping prices.

These were the Beanie Babies, a line of under-stuffed plush toys that ignited a frenzy of speculative investing and dollar signs in collectors’ eyes.

At the center of this craze was the Beanie Babies’ creator, Ty Warner, an eccentric businessman with a knack for manufactured scarcity.

Warner transformed his modest toy line into a speculative mania through careful product releases and retirements. By the peak of “Beanie Mania” in the late 90s, collectors spent thousands on rare designs and “retired” classics. But like all bubbles, the Beanie Babies craze proved unsustainable.

The hysteria finally burst in the early 2000s, And millions who had dreamed of funding their retirements with Bennie Babies were left with piles of worthless plush.

The story of Beanie Babies reveals much about human psychology and the lure of speculative bubbles. But it also shows how an ingenious product strategy allowed Warner to spin straw into gold. Here is the full story behind the rise and fall of Beanie Babies.

One Father of Miami

Turning Miami's Swamps into Sunshine

The Roaring Twenties conjure up images of flappers, speakeasies, and wild parties. But no city embodied the decadent spirit of the Jazz Age more than Miami Beach.

And no figure did more to transform Miami Beach from a mosquito-infested swamp into the iconic party town than Carl Fisher.

Fisher was a classic American go-getter. He embodied the rags-to-riches ethos that anything was possible with enough hustle and chutzpah. A serial entrepreneur from childhood, Fisher dropped out of school at 12 to open a bicycle repair shop.

But it was in Miami Beach that Fisher's talents as a shrewd businessman and master promoter came together.

Fisher single-handedly transformed the worthless strip of mangrove-choked land into the playground for the rich and famous

His epitaph in the "Miami Daily News" read:

"Carl G. Fisher, who looked at a piece of swampland and visualized the nation's greatest winter playground, died ... in the city of his fulfilled dreams."

Fisher, however, looked at Miami Beach differently.

"Wasn't any goddamned dream at all," he once said. "I could just as easily have started a cattle ranch."

In her book "Fabulous Hoosier," Jane Fisher wrote of her ex-husband, Carl Fisher:

"I don't believe he even thought in terms of money.... He often said, 'I just like to see the dirt fly.'"

Read more on The Bubble Blog