Gyroscopic Investing

Mr. Tsukakoshi offers a riposte, in a book titled “Tree-Ring Management”—so-called because a tree steadily adds one ring a year, rather than expanding and contracting erratically. “Trees keep growing even when the weather is bad,” Mr. Tsukakoshi writes. “Companies should be like that, too. You have to keep growing little by little, even if the pace is slow.”

“We were like a tree whose rings grew too rapidly at one point, and whose trunk became weak and prone to breaking,” Mr. Toyoda said at an earnings announcement last year. “To grow sustainably means to build a ring around the tree trunk each year.”