Japanese companies with a durable competitive advantage

Warren Buffett emphasizes buying companies with a durable competitive advantage, while Peter Lynch talks about finding companies that aren't well known but are run well, and poised for growth. I am currently in Japan visiting my brother and I wanted to mention a few companies that I see fit those molds. I haven't had time to look up stock information, or see if they are publicly traded companies, but maybe there are a few gems in here.

First up are beverage companies in the Coca-Cola realm. In Japan, there are two main beverage companies, Asahi and Suntory, that have a monopoly on the beverage industry, be it soft drinks, beer, or fruit juice. Japan is litered with vending machines, and you are guaranteed to see a Suntory or Asahi product on every street, usually for 20-30 yen ($.20-$.30) more than you can buy them in a regular store.

Second are the convenience stores, in the vain of 7/11, which they actually have in Japan. The two other main stores are FamilyMart and AmPm. Most of these stores are open 24 hours and you can't go a few blocks without seeing one. There have always been people in these stores, regardless of the time I have entered one.

Finally, there is the grocery chain Daiei, similar to a Meijer or Kroger (for you Michiganders) or a smaller Wal-Mart that has a full grocery section. This seems to be the best place to do all in one shopping, although I have heard there are a few Costco stores in Japan, for those bulk shopping trips.

I don't know if anyone of these companies have stock that can be purchased, but for those looking at companies within Asia, those are a good place to start.

Beating the Street

I'm new to investing and started by reading "The New Buffettology" (Clark, M. Buffett) and most recently Peter Lynch's 1993 "Beating the Street." I was enamored with Lynch's very candid perspective of his career. What I learned in a nutshell summary is this:

(1) Like sports betting, for every financial analyst saying "buy," another is saying "sell." Picking stocks can be a coin flip with the bets evening out on both sides...the surest winners are those charging broker fees.

(2) Great analysts are separated by special knowledge into a company/sector. Some of Lynch's biggest scores were from talking with a CEO over dinner and discovering something great about that CEO's competitor. Since Ellen Kullman won't be inviting me to dinner any time soon, I'll need another avenue.

(3) Absent special knowledge of a sector, we're all largely speculating on the same set of data (balance sheets, earnings history, cyclical trends etc.).

(4) Warren Buffett's principles are the most sound fundamentals to abide by for analysts who can't dine with Meg Whitman.

I'm a huge fan of Peter Lynch now. Reading his book was like listening to his career war stories over a late evening beer. Yet even Lynch admits quite candidly that he failed to beat the market during some critical upswings in the economy. So if even Peter Lynch can hit and miss, what chance does the novice investor have?

I guess I could take away the following bullet points to guide me: (1) Warren Buffett is pretty crafty. Invest in companies showing sound fundamentals and a positive, sustained earnings trend if you want to make it over the long haul (2) seek companies with powerful competitive advantages when possible (3) understand what it is you're investing in and (4) always check EDGAR...it's the closest I'll ever get to that CEO dinner table. --Schlitz