A friend took me to a famous restaurant that’s nearly impossible to get into. He’d apparently made the reservation a year ago, boasting that it was like scoring front-row seats to a sold-out show—so I decided to take him up on the offer. I’d been told that the restaurant serves all of the guests at the same time, so not wanting to risk being late for the 6:00 p.m. reservation (especially if I hit traffic), I left the office early. I arrived at the restaurant with about 10 minutes to spare. Relieved to have made it on time, I reached for the door—only to find it locked. I looked around and saw a small group of people standing out front in the heat, presumably fellow diners.

It was just before 6:00 p.m. when the door was finally unlocked and we were shown in. From there, we were treated to a truly delicious meal, along with drinks that paired beautifully. It was a little after 8:00 p.m. when we stepped out, having paid what I can only describe as a shockingly high bill. Outside, a new line had formed: guests for the 8:30 p.m. seating, waiting in the heat just as we had a few hours earlier.

How does this add up? A long wait, a steep bill—and still, people are thrilled just to get a seat. The answer is simple:

The number of people willing to wait outside or pay that much (demand) exceeds the number of seats the restaurant can offer (supply).

Restaurant review sites like Tabelog, the spread of online reservation systems, and better translation tools have made food information easier than ever to find. Add to that the influx of overseas visitors to Japan since the COVID-19 pandemic, and the result has been a persistent excess demand among foodies for “coveted restaurants.” On the other hand, the supply of such restaurants has not been able to keep pace with the explosive surge in demand brought about by these changes. This structural mismatch is exactly what is driving the runaway success of restaurants like the one I had visited.

The same dynamic may also help explain the recent rise in Tokyo real estate prices. With more and more visitors coming to Japan and more people discovering its appeal, demand for Tokyo real estate is growing. Speculative interest, anticipating that trend, is adding even more fuel to the rise. It may also have something to do with the fact that, globally speaking, Tokyo real estate has long been relatively undervalued compared to major cities like New York, London, or Hong Kong. In any case, it seems clear that the supply of properties simply has not kept up with the sharp increase in demand. What I want to highlight with these two examples—the restaurant and Tokyo real estate—is the following:

Pay close attention to how demand is shifting. Where exactly is that change happening?

And is supply lagging in response?

Simply put—just as the title suggests—the key is to see what’s in excess and what’s in short supply.

Rare earths, now a focal point in US–China tensions, were already facing a global supply shortfall amid growing demand. Now, with China—by far the dominant producer—imposing export restrictions, the issue has moved beyond rising prices to whether these materials can even be secured at all.

The rise in gold and Bitcoin prices can be explained by a global glut of money flowing into assets with limited supply. This stands in contrast to currencies, which carry the risk of excessive printing when a country’s situation worsens. I only recently came to this realization, but those who invested in Bitcoin early had real foresight. That said, its market cap is still below Microsoft and Apple, and reportedly just a tenth of gold’s—so personally, I can’t help but feel it still has room to rise.

Finally, if you’ll pardon a bit of self-reference, let me touch on our own business. As Japan’s aging society continues to advance, demand for various forms of end-of-life planning has been rising year by year. But the supply of appropriate information and services has yet to catch up. I believe there’s a major opportunity here, and this is exactly what we plan to deliver—please look forward to it.

Hirotaka Shimizu
Chairman and CEO
Kamakura Shinsho, Ltd.

Image material：PIXTA