Articles
Articles
Independent analysis of Japanese equity markets and investing fundamentals, grounded in primary data.
- Theory
Financial Statement Basics - Using PL, BS, and CF for Equity Investing
The income statement, balance sheet, and cash flow statement form the backbone of fundamental analysis. This article explains how each works, how they interconnect, and what equity investors should focus on.
- Theory
Value vs. Growth in Japan - Long-Term Performance Comparison
How do value stocks (low PBR, low PER) and growth stocks (high-growth expectations) compare in the Japanese market over decades? This piece examines the evidence, risk-return profiles, and style-rotation dynamics.
- Theory
Stock Splits - Mechanics, Theory, and Observed Effects
A stock split should be value-neutral in theory, yet empirical data shows post-split price appreciation is common. This article examines the mechanics, investor psychology, liquidity benefits, and Japanese market evidence.
- Theory
Combining PER and PBR for Valuation - Beyond Single-Metric Limits
PER alone or PBR alone can miss value traps and overpriced growth names. This piece shows how combining both metrics - anchored by the PBR = PER x ROE identity - creates a more robust valuation framework.
- Theory
Choosing Shareholder Benefits - Yield Calculation, Record Dates, and Abolition Risk
Shareholder benefits (kabunushi yutai) are a shareholder-return system unique to the Japanese market. This article covers how to calculate benefit yield, the mechanics of record dates and ex-dates, the post-2020 trend toward benefit abolition and its background, and key points to watch when investing for benefits.
- Theory
Volume Analysis Fundamentals - What Trading Volume Reveals About Market Participants
Trading volume is a critical market data point alongside price charts. This article explains what volume spikes and drops signify, price-volume divergence patterns, and the practical use of VWAP (Volume Weighted Average Price).
- Theory
How to Read an Earnings Summary (Kessan Tanshin) - Key Figures and Disclosure Points
The kessan tanshin (earnings summary) is the quarterly earnings flash report disclosed by listed Japanese companies. This article provides a practical guide to the four-tier income statement, progress-rate analysis, earnings-revision disclosure rules, and how to access filings on EDINET.
- Theory
How Share Buybacks Affect Stock Prices - Theory and Evidence from the Japanese Market
Share buybacks (treasury stock acquisitions) have surged among Japanese companies as a major shareholder-return tool. This article covers the theoretical EPS accretion effect, stock price reactions at announcement, and how actual acquisition progress influences the market - based on TSE data.
- Theory
Using the New NISA Growth Investment Slot - Maximizing Tax-Free Benefits with Individual Stocks
The Growth Investment Slot of the new NISA launched in 2024 (annual limit of 2.4 million yen) allows dividends and capital gains on individual stocks to be received tax-free. This article covers the structure, eligible products, strategies for individual stock investing, and constraints to be aware of.
- Theory
How to Read ROE - What Return on Equity Reveals and the DuPont Decomposition in Practice
ROE (Return on Equity) is a flagship profitability metric, but a single number can be misleading. This article covers the DuPont three-factor decomposition, sector-appropriate benchmarks, and how to detect leverage-driven ROE inflation.
- Theory
How to Calculate Dividend Yield - From Share Price and Dividends to Real Yield
Dividend yield is calculated as annual dividend per share divided by share price times 100, but practical investment decisions require understanding after-tax yield, dividend growth rates, and the relationship with payout ratios. This article walks through the basics to real yield derivation with concrete numerical examples.
- Theory
Reading Margin Buy and Sell Balances - How Useful Is the Signal?
Margin balances - the buy side and the sell side of margin transactions - are widely used as supply-and-demand indicators for individual Japanese stocks. This piece reviews how to interpret them, the derived metrics, and common misreadings.
- Theory
TOPIX vs Nikkei 225 - Composition, Methodology, and Index Behavior
TOPIX and the Nikkei 225 are Japan's two flagship equity indices. The choice of methodology - market-cap weighting versus price weighting - shapes very different return profiles and constituent biases.
- Theory
PBR Below 1.0 - What the Number Means and Why TSE Pushed Companies
About half of TSE Prime listed companies have traded below 1.0x book value. This piece explains what a sub-1.0 PBR signals, the background to TSE's 2023 disclosure request, and how listed companies have responded.