No, you have it right. When installing the cam, the keyway points up, leaving you with those valves to set on their base circles.
When you look into other engines, you will find that many of them start with cylinder#1, so don't confuse yourself.
I actually made a typo of that in my own book, in the early copies! It's fixed now, though...
It happened after I installed an aftermarket (K&H ?) cam in an engine just before I wrote that: it was a 1990-something vintage cam, and the key on the end points DOWN when installing it, as they are ground 180 degrees out from Honda's: technically it makes no difference in the end as far as the engine is concerned. But, I was sleepily typing away on the 'adjusting valves' section and didn't notice until months later that I had typed to set the cam in the chain-set position (which is with keyway down +15 degrees), followed by 2 turns and setting "valves on #1..." - duh. So, it has caught many of us, one time or another. (Note: if those of you with the early books haven't caught this yet, download and print the "Errata sheet" in the For Sale listing of the book, slip it into pages IC-25 and Appendix C-1 for reference ...).
At least one thing is sure: you can't loosen the adjusters far enough to get .002" or .003" of slack if the cam is at the top, so that's always a good clue.
