I would like to thank all of you for your interest and attendance at the first Japan Small Company Investment Conference!

I have been involved with the Japanese market since 1979, and have worked with Japan on an almost exclusive basis since 1984. That’s 18 years of Japan focused business, and perhaps over 100 trips. I wish I had a thousand-yen note for every person who asked me over the past decade, whether Japan is still as futuristic and as sexy a market as it appeared to be during the so-called bubble period of the 1980’s. If I did, I’m sure I could retire tomorrow and purchase any of the seemingly endless stream of provocative Japanese products like Lexus convertibles, digital camcorders, high-end electronics, and fill my apartment with flat panel TV screens on the wall of every room.

For anyone who may have visited Japan in the last several years, two things are readily apparent. It is still the world’s second richest economy (even after a decade of recession!), and it still looks like the world’s richest place.

Tokyo streets today resemble a contemporary, jazzed-up version of the movie Blade Runner, with more and more vibrant and captivating video screens draped like curtains around the surfaces of new and glittering office buildings. Everyone seems to be walking with a wafer-thin, pearlescent white, complexly curvilinear, and totally ephemeral looking cell phone, with a bright color screen that is throbbing with images similar to those on the jumbo screens hanging from the buildings all around.

You can see more futuristic design and technology by walking down one street in Tokyo, than you can see all over, in most other world capitals.

Yet, despite Japan’s economic problems that we read about in the papers virtually everday, Japan’s technological innovations continue to supply the world with new and exciting products, primarily in terms of software, media, electronics, telecom and internet sectors. And while Japanese companies are among the world’s leading marketers, many of its exports have become increasingly commodified, which has put a great deal of deflationary pressure on the real value of Japan’s exports.


In addition, the once popular notion of cross-shareholdings, which artificially propped up so much of Japan’s domestic market, has become obsolete with the relentless international pressure by the world’s leading multinationals to break into the Japanese economy.

Now, with the wind taken out of the stock market’s sails, Japan’s economy, and the political infrastructure underpinning its decline, is transforming the markets.

1. Large corporations have initiated massive sell-offs of non-core businesses at a pace perhaps faster than their international shopping spree’s of the 1980’s.

2. Inefficient, government subsidized industries, such as construction, are having their life support weaned away from them.

3. The banking industry is being forced to correct its previously mismanaged business model and to get back in the business of lending (which they are not doing now).

4. With large corporations suffering, Japan’s lifetime employment system has collapsed, and for the first time, senior managers, executives, engineers, and other professionals, are leaving their companies and establishing entrepreneurial start-ups as never before.

This has all resulted in excellent investment opportunities among smaller, more specialized businesses.

And the Japanese capital markets realize that these smaller, focused companies are successful, with a positive market receptivity to 169 IPO’s during the last 12 months, as compared to a comparable 98 IPO’s in the US.

Accordingly, we will hear from examples of these kinds of companies during the 8 company presentations later today.

We will also gain some further insights into the markets in general provided by our keynote speakers, Mr. Nobuharu Ono, President and CEO of NTT DoCoMo USA, and Mr. Richard Katz, Senior Editor, The Oriental Economist Report. I’ld like to thank them for their support.

I would also like to express our thanks to Sonnenschein Nath & Rosenthal, and to Deloitte Touche Tohmatsu, for their much valued participation in the event today, and their sponsorship which has enabled us to accommodate the large group in attendance.

Thank you all for your interest, and I hope you have an enjoyable, interesting, and informative day with us.