Happy weekend! I have not been blogging as regularly in recent months as there has just been a lot on my plate. Hopefully things will settle down a bit more towards the end of the year. I was also in Korea recently to attend an investment conference, where folks were mostly trying to figure out whether this is early innings Japan in terms of corporate governance reforms or simply much ado about nothing.

There are signs of real change recently, however, and perhaps the most significant is the amendment to Article 382-3 of the Commercial Code, which expands the duty of loyalty by directors to a company and its shareholders (previously, their duty of loyalty was just to a company). That is a promising foundation from which to build, but Korea’s corporate governance reform agenda clearly still has a long way to go. The broader observation I would make in the Korea vs. Japan comparison, however, is with respect to the quality of listed companies.

Korean companies seem to be increasingly squeezed at the high end (competing with Taiwan in tech/semis) as well as the lower end (competing with China in industrial sectors). I’m no Japan expert, but having spent more time on companies there in recent years, I am amazed by how many high quality “compounder” companies I come across that really dominate their particular niche/sector. Korea does have a cheaper starting point in terms of valuations and you maybe get some re-rating from unlocking the low hanging fruit, but overall, I didn’t really come away with any compelling investment ideas. Given the additional language barrier for foreign investors, perhaps the best way to invest there is via a domestic Korean fund manager who knows the landscape well and can figure out which companies to target/engage with in order to unlock value? Happy to exchange notes or ideas!

Anyway, on to this week’s content links, which include Nassim Taleb on the world in which we live now, Django Davidson of Hosking Partners on an investment paradox in the world of AI, Nicolai Tangen’s conversation with Niels B. Christiansen, the CEO of LEGO, Russell Napier on bonds, bear market investing and France’s dilemma, Bloomberg on Balaji Srinivasan’s Network School in Forest City, and Jim Mellon on his current positioning and where he sees investment opportunities.

Finally, in the midst of the current AI mania, I enjoyed rewatching the AlphaGo documentary. Almost 10 years have passed since the AlphaGo vs. Lee Se-dol challenge match, which was widely seen as a landmark moment for AI (amazing how far we have come since then!). Lee Se-dol has since retired, saying he could “no longer enjoy the game.” Indeed, many Go enthusiasts and players now long for a time before AI, given how profoundly it has changed the nature of the game. It might not quite be a harbinger of things to come for humanity, but it is a timely reminder that there is no going back.

• Nassim Taleb: The world in which we live now.
• Hosking Partners: Django Davidson explores an investment paradox in the world of AI, which raises quite a few capital questions.
• In Good Company: Interview with Niels B. Christiansen, CEO of LEGO.
• FTAV Q&A: Russell Napier on bonds, bear market investing, and France’s dilemma.
• Bloomberg: Broken $100 billion dream city becomes refuge for tech utopians.
• The Master Investor Podcast w/ Wilfred Frost: Jim Mellon – bearish US, big opportunities in the UK, China & robotics.

View from a warm and sunny Seoul (Yeouido):