Do not be lured by the sweet trap of the "Nadeshiko brand"

When you start investing in stocks, you will surely hear the term "〇〇-related stocks." Recently, the government and the Tokyo Stock Exchange have been actively promoting “Nadeshiko stocks.” These are companies where women are active, but from an investor’s perspective, this brings many questions.

I will explain why I deem this theme to be “meaningless” in three points.

1. A company is not a “school” or a “city hall”

The criteria for being chosen as a “Nadeshiko stock” are things like the number of female managers and the ease of taking childcare leave—essentially an internal mechanism of the company.

But please think about it. When you buy a stock, you are thinking the company will be profitable, right?

Company A: 50% of managers are women, but it is in the red and its stock price is depressed.

Company B: It’s a male-dominated, rough workplace, but a groundbreaking invention yields tenfold profits.

As an investor, which should you buy? Evaluating only outward appearances like the gender of management and neglecting the crucial “earning power” is a misguided investment criterion.

2. Costs for appearances eat into profits

Companies that want to be chosen by the country desperately tighten the numbers on “women’s representation.” However, forcing numbers can lead to personnel decisions that have nothing to do with actual ability.

This is what economics calls “misallocation of resources.” An organization that selects people by “attributes” rather than by suitability will struggle to survive in a tough global market. We investors want to fund companies that possess the determination to ruthlessly seize profits, not just ones that conform neatly.

3. “What the country promotes” may be too late?

There is a saying in the stock world: “When the country or the newspapers start making a big fuss, that boom is over.”

By the time a company is announced as a “Nadeshiko stock,” that information is already known in the market. When a beginner sees “the country is recommending this, so it’s safe,” they may rush in, while investors like us view it as an opportunity to sell at high prices.

Summary: The essence of investing is “numbers” and “desire.”
The term “women’s advancement” itself is a wonderful social goal. However, bringing it into investing as a metric is a different matter.

In the world of investing, you won’t earn even a single yen with mere sentiment or pretty speeches.

“Is this company earning more cash tomorrow than today?”

“Is this stock something every investor around the world would crave to own?”

Only focus on this essence. If you’re swayed by the pleasant-sounding word “Nadeshiko,” you’ll become market prey.

‘Annual yield 3287%. The Extremes of USD/JPY Correlation — A Macro Indicator-Derived “After-the-Fact Janken” Investment Strategy.’

“For those tired of candlestick ‘deceptions.’ A fundamental FX model that wins through global economic causality.”

https://www.gogojungle.co.jp/tools/ebooks/75653?via=users