Key Takeaways
- • Andrew McDermott, founder of Mission Value Partners (a Japan-focused investment firm started in 2010), argues in a Top Traders Unplugged interview that Japan's economic model delivers what he regards as a working form of capitalism, organized around competence in making things rather than compensation or financial engineering.
- • McDermott says Warren Buffett ignored Japan for roughly 50 years before going "all in" at a time when the investment industry had given up on the market.
- • McDermott cites Japanese investment in the US Southeast totaling over $20 billion in his home state of Georgia alone, spanning steel, rare earths, nuclear power, quantum computing and defense-related manufacturing.
- • McDermott says Japanese machine tool orders hit a record in both the United States and China last month, and frames the reshoring of manufacturing as vindication of Japan's industrial strategy.
- • McDermott contrasts Japan's distribution of wealth, which he describes as the most equitable in the developed world, with the United States and China, which he says have similarly concentrated wealth distributions.
Summary
In an episode of Top Traders Unplugged hosted by Alan Dunne, Andrew McDermott, founder of Japan-focused investment firm Mission Value Partners, laid out his view that Japan's economic system is the most effective model currently in operation. McDermott, who began his career in IT at JP Morgan before moving into asset management with Southeastern Asset Management, defined a functioning economic system as one that enables human flourishing without undermining individual liberty and distributes the gains of free enterprise equitably, including both profits and losses. On that basis he argued that neither the United States nor China is performing well, while Japan "is beating the rest of the world by a long shot."
McDermott said the core of Japan's model is that it is "organized around competence" rather than compensation, which he contrasted with the United States. He rejected European "third way" or stakeholder-capitalism explanations, arguing that the decisive factors are the ability to make things, access to energy and geography, and trade based on comparative advantage. He cited the UK's shift toward financial leadership and the leveraged buyout of Houdaille by KKR in 1980 as a turning point in the US, and said the same financial-first approach has spread across Europe outside Germany.
On Buffett, McDermott said he had learned value investing from Buffett's work and met him early in his Japan research, watching him "ignore Japan" for about 50 years before investing heavily "at precisely the time that our industry gave up." McDermott also said the reshoring of manufacturing is validation of Japan's approach, pointing to more than $20 billion of Japanese investment in his state, which he said covers steel, rare earths, nuclear power, automated manufacturing and defense. He added that Japanese machine tool orders reached a record last month in both the US and China, and that US machine tool demand had declined for decades as production moved to China.
The interview previewed a Mission Value Partners event on October 28, 2026, in Nashville, focused on partnering with Japanese universities, and a Southeastern US-Japan Gathering scheduled for the following week. The conversation was recorded on October 21 and is presented as opinion from the interviewee rather than established fact.
McDermott said the core of Japan's model is that it is "organized around competence" rather than compensation, which he contrasted with the United States. He rejected European "third way" or stakeholder-capitalism explanations, arguing that the decisive factors are the ability to make things, access to energy and geography, and trade based on comparative advantage. He cited the UK's shift toward financial leadership and the leveraged buyout of Houdaille by KKR in 1980 as a turning point in the US, and said the same financial-first approach has spread across Europe outside Germany.
On Buffett, McDermott said he had learned value investing from Buffett's work and met him early in his Japan research, watching him "ignore Japan" for about 50 years before investing heavily "at precisely the time that our industry gave up." McDermott also said the reshoring of manufacturing is validation of Japan's approach, pointing to more than $20 billion of Japanese investment in his state, which he said covers steel, rare earths, nuclear power, automated manufacturing and defense. He added that Japanese machine tool orders reached a record last month in both the US and China, and that US machine tool demand had declined for decades as production moved to China.
The interview previewed a Mission Value Partners event on October 28, 2026, in Nashville, focused on partnering with Japanese universities, and a Southeastern US-Japan Gathering scheduled for the following week. The conversation was recorded on October 21 and is presented as opinion from the interviewee rather than established fact.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.