【Stock Selection】The critical point that most people ignore
Hello, this is Shimoyama.
“The other day, when I was talking with a student from the United States,
what kind of music do you listen to?” I asked,
and the reply was, “K-POP.”
I was a little surprised. She said she likes BTS.
This is what a friend told me.
Shimoyama: “Is that student American?”
Friend: “Yes. He doesn’t listen to much music from over there.”
Shimoyama: “That’s a rare American.”
Friend:
“No, not really.
Even in America, K-POP is popular.
It seems there are friends around who listen to it.”
Apparently, neighboring Korea’s K-POP
is popular worldwide.
In Japan as well, many young people like K-POP, right?
Also, regarding fashion, in Japan
more and more people seem to reference Korean fashion.
According to a survey by Rakuten,
the flea market app “Rakuma,”
in response to the question
,“Which country do you reference most for fashion outside Japan?” the top for teens and twenties is “Korea.”
Among teenage girls, the support rate for “Korean fashion”
is overwhelmingly around 70%.
(Reference:https://ecnomikata.com/ecnews/23056/)
Conversely, among Koreans,
many people seem to like Japanese culture.
Despite the deterioration of Japan-Korea relations,
the younger generations have goodwill toward each other’s culture.
However, considering the current situation,
there are circumstances where it’s hard to travel from Korea to Japan due to surrounding opinions.
…
In fact, news often reports that
tourism from Korea has drastically decreased.
As for August this year,
“航空旅客 from Korea to Busan-Osaka/Japan routes in August decreased by 32% year over year.”
Data was announced.
(Reference:https://headlines.yahoo.co.jp/hl?a=20190904-00000015-yonh-kr)
Also, in air travel, flight suspensions and reductions are occurring one after another.
Peach, a Japanese low-cost carrier,
has also announced that due to fewer tourists from Korea,
“three routes suspended, one route reduced”.
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Critical point that most ignore when selecting brands
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Now, the main topic, after seeing these situations,
“Are stocks related to the tourism industry high risk?”
you might rethink.
Next year there will be the Tokyo Olympics,
tourism is likely to be in focus,
but external factors like world affairs and disasters
easily affect tourism-related stocks,so it may be safer to avoid them for a while.
Indeed, external environment impact
cannot be denied.
Moreover, the industry has large peak and off-peak differences,
and in times of crisis even peak seasons can see sales plummet
in tourism-related industries.
However, that doesn’t mean
every tourism-related company is in danger.
For example, Peach Aviation
is considered a winner in Japan’s harsh LCC industry.
In its announced consolidated results for the year ending March 2019,
operating profit was 4.1 billion yen, a 29% year-on-year decrease,
yet the company is fundamentally strong.
Why does Peach stay a winner?
Behind its success lies a corporate philosophy,
a unique mindset.
What is that mindset?
“To eliminate war.” This is the idea.
“Huh, an airline eliminating war?”
You might think the connection is unclear,
but it is a coherent argument.
To explain its meaning,
I will quote Shinichi Inoue, the president,
↓
“In the past, there were unhappy incidents between Japan and Asian countries.
To prevent those from happening again,
we want to create a state where friends are in contact with many countries.
To achieve that, even when young, they should go abroad and
experience various cultures, meet many people.
So what to do? We need an airline that a young person with little money can ride and go to many countries. Peach is doing that.”
— Kazutsugu Yamaguchi
“New Type Era” (Diamond Inc.)
July 3, 2019, 1st edition
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What do you think?
It’s a very unique perspective, isn’t it?
Many people may only see Peach as a“cheap airline.”
But behind that lies such passionate thinking.
In fact, this has been one of Peach’s strengths.
And this mindset is a factor in Peach’s strength.
↓
“Because there is meaning in this,
we lower costs,
increase routes,”
and draw out creativity and ingenuity
without being cynical about management challenges.
Because the quantitative goal of lowering costs and increasing routes
is supported by real meaning.”
Shu Yamaguchi
“New Type Era” (Diamond Inc.)
July 3, 2019, 1st edition
P.89引用
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In other words, by clearly presenting to employees
the meaning behind the work in front of them, this
drives their passion.
Put yourself in the position of an employee and think:
If you feel a sense that ‘this work connects to world peace,’
wouldn’t your motivation rise?
And in these volatile times,
a company that can survive is likely
one that has this kind of purpose.
A company with a clear ‘meaning of existence’ and
that shares that meaning with its employees in a relatable way,
and fosters motivation,
that is a major criterion for evaluating a company.
If you are thinking of investing in promising stocks,
when selecting investment targets,
you might focus on whetherthe company’s existence is for a meaningful purpose.
Considering that purpose is a meaningful perspective.
For long-term investments, this perspective becomes increasingly important.
Now,
among Japanese companies, which ones clearly possess such a sense of purpose?
…
What do you think? Have you thought of any?
Unfortunately, you may not have many come to mind.
Of course, each company has its own philosophy in management,
but
the president passionately speaks about the company’s purpose,
and that is shared with employees and boosts motivation.
Perhaps,
even as the NY Dow hits a new high in July,
the Nikkei Stock Average lingered around the 20,000 level,
maybe there is a reason related to that as well.
With that, please enjoy today as well.
Thank you for reading until the end.
Keizo Shimoyama
