For most of my life something has been calling me to visit Japan. As a child, I spent tens of thousands of hours playing Super Nintendo, Pokemon, and Playstation though I didn’t know anything about where they came from. As a teenager listening to hard rock and heavy metal music, I’d find some obscure rock band I liked only to later learn that they were “Big in Japan.” How was there an entire country that shared some my most esoteric musical tastes?
Years later in college I dated a woman who introduced me to the work of Akira Kurosawa, one of Japan’s greatest filmmakers. Though Kurosawa is most well-known for Seven Samurai, his film Dreams is a visual masterpiece that remains in my top 10 favorite movies.
And, shortly after I started writing about investing, I came to learn the go-to phrase in every investment skeptic’s playbook, “Now do Japan.” Since Japan’s stock market performed poorly throughout the 1990s and 2000s, the phrase is typically used as a response or “clap back” to anyone who says anything positive about the power of investing.
For example, I might say, “Over a 20-year holding period, the probability of a positive return in the Dow was 96% with the average return of ~6% annualized.” And the naysayers would say, “Now do Japan,” and show something like this chart (using data from 1980-2017) as a counterargument:
The point of the phrase is to show that investing isn’t always easy. This idea isn’t wrong, but using Japan as a counterexample is the highest form of cherry-picking. It uses the worst exception in history to argue against the rule.
Nevertheless, my response to “Now do Japan” has always been the same: few people invest all their money at once! Yes, if you poured your life savings into Japanese stocks at the top in 1989, it would have been a disaster. However, if you bought into Japanese stocks over time you would’ve had a much better experience.
As the chart below illustrates (with data through November 2024), buying over time turned the worst stock bubble in history into one that at least kept pace with what you put into the account (i.e. your cost basis):
While this result isn’t great, it’s still far better than what permabears make it out to be.
Investment debate aside, Japan has been subtly calling to me throughout my life. This is why I was so excited to finally visit the land of the rising sun for last month. And, it delivered on its promise.
The people were nice, the food was incredible, and the travel experience was so easy. Before I visited I was afraid that it would be difficult to get around due to the language barrier. But, thanks to smartphones and Japan’s highly organized transit system, the opposite was true. The trains run on time and all the subway stops are numbered to make it easy to figure out where you are going. It’s the best transit system I’ve ever used.
For example, if you wanted to go to Shibuya station in Tokyo, numbered G-01 on the Ginza line, and you are at stop G-08 on the Ginza line, then you would only need to go 7 stops [G-08 -> G-01] to get there. Google Maps has all this information, but you can find it throughout the subway stations as well.
Japan’s transit system functions at such a high level because Japan is a country of rules. For example, in Tokyo everyone walks on the left side of the sidewalk or stands on the left side of escalators. No one eats while walking. No one talks loudly on the metro. I was in a Tokyo subway car once with over 30 people and it was so quiet I could hear a pin drop. Some of these rules are written down, but many of them aren’t. Everyone just follows them and it makes for a more orderly and efficient society.
There is also a strong preference to not offend others in Japanese culture. For example, many Japanese restaurants request that you don’t wear strong cologne or perfume so that you don’t ruin the meal for other guests. While such rules can seem overly restrictive, they also ensure that everyone has a pleasant experience wherever they go.
And my experience in Japan couldn’t have been more pleasant. One of my favorite things I did on my trip was visit the silver pavilion in Kyoto (Higashiyama Jisho-ji) and its beautiful moss garden. Jensen Huang once told a story about his visit to this same moss garden that stuck with me. As Huang recalled:
Along with the other tourists, we wandered through the meticulously groomed moss garden and I noticed the lone gardener. Now remember…the moss garden is gigantic. It has the largest collection of every species of moss in the world. And it is exquisitely maintained.
I noticed the lone gardener squatting, carefully picking at the moss with a bamboo tweezer…And so I walked up to him and I said, “What are you doing?” And in his English he said, “I’m picking dead moss. I’m taking care of my garden.” And I said, “But your garden is so big.”
And he responded, “I have cared for my garden for 25 years. I have plenty of time.”
Huang went on to state that when you are following your life’s work, time is not necessarily in short supply. This idea echoes Seneca’s On the Shortness of Life from a few millennia ago:
It is not that we have a short time to live, but that we waste a lot of it. Life is long enough, and a sufficiently generous amount has been given to us for the highest achievements if it were all well invested.
The older I’ve gotten, the more I’ve come to accept this idea. Japanese culture embodies it as well. There is a sense of dedication to a craft and focusing on the long-term in Japan that I haven’t seen anywhere else. This explains why 6 out of the 10 oldest operating companies in the world are located in Japan.
These people believe in working toward something and that great things take time. I do too. I’ve personally experienced the power of this idea through this blog which is almost 8 years old now. I had no idea that it would transform my life when I started it, but it’s been upside surprises ever since.
And, the biggest upside surprise by far has been how well Just Keep Buying has been received by Japanese readers. Before my trip I scheduled a handful of interviews to promote the Japanese edition of Just Keep Buying. This allowed me to meet some of the people responsible for the book’s creation and get an inside look at Japan’s business culture (something most tourists don’t get to do).
Well, during one of these interviews, my Japanese publisher informed me that Just Keep Buying had sold 130,000 copies in Japan. This is double what I was last told by my Japanese publisher and is also double the number of copies I’ve sold in the United States! I can’t explain how crazy this is and how thankful I am to have so many Japanese readers. It really was the cherry on top for my trip.
This achievement seems unbelievable now, but it only happened because I did something rather insignificant each week for the last 8 years—I wrote a blog post. But, week after week, those blog posts added up and became something more.
This is true of everything we do in life, but Japan was a great reminder of it.
After spending 10 days in the land of the rising sun, I’ll never hear the phrase “Now Do Japan” quite the same again.
With that being said, thank you for reading and indulging me on this travel blog post. Of Dollars And Data will return to its regularly scheduled financial programming next week.
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This is post 427. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data
