📘 [Is it true that 'Japan will no longer grow'?] Reasons why there is investment value even in a mature market and how salaryman investors should approach it

👋 Introduction: Is it true that 'Japanese stocks will no longer grow'?

Hello, this is Kattobei.
'Japanese stocks are a lost cause'
'If you want growth, America is the only choice'
——Have you ever heard words like these?

Admittedly, Japan is...

• experiencing a shrinking population

• facing an aging society

• not exactly thriving in politics or the economy

Given that, it is no wonder it 'doesn't look like a growing country'.

But, is it really 'no longer worth investing in'?

In this article, while organizing the reasons why people say 'Japan will not grow', I will explain
the reasons why I think it is still a viable investment target even in a mature market from my own perspective.

📉 Why is it said that 'Japan will not grow'?

First, let's review the 'reasons why it is often thought so'.

✅ (1) Domestic demand is shrinking due to population decline

• Declining birthrate -> Tapering consumption

• Labor shortage -> Lower productivity

This is an unavoidable trend.

✅ (2) Low economic growth rate

• GDP growth rate is limited to 1-2%

• 'Dull' compared to other countries

The reality is that it is hard to see a 'growth story' like that of the US or emerging countries.

✅ (3) Political inertia

• Change takes time

• Weak development of new industries

There are also many voices saying things like, 'There are too many regulations, making it hard for innovation to happen.'

💡 Even so, here is my reason for 'continuing to hold Japanese stocks'

This is my conclusion after 10 years of investing, but...

I will introduce three specific perspectives I use to think about this👇

✅ Perspective 1: 'Growth' does not equal 'rising stock prices'

• Even if the growth rate is high, you cannot buy if the stock price is overvalued

• There are companies in mature countries that consistently generate profits

• Japanese stocks are still in the 'undervalued' category globally

In other words, saying 'Japanese stocks don't grow, so don't buy them' isa bit short-sighted.

✅ Perspective 2: The strength of 'maturity' equals 'stability'

• Mature industries are resistant to economic fluctuations

• Japan is strong in infrastructure, daily necessities, and manufacturing

• Looking at the medium to long term,there are plenty of high-dividend, stable-earnings stocks

I think companies that 'aren't flashy but keep generating steady profits' are perfect for salaryman investing.

✅ Perspective 3: Japanese companies are 'in the process of changing'

In the past, the impression was that 'Japanese companies are weak at change,' but now...

• They are actively expanding overseas (e.g., Nidec, Keyence, Daikin)

• Investment in DX and automation fields is underway

• Dividend returns and shareholder returns have been strengthened

Among them, stocks that have evolved so much that you think, 'Wait, was this company like this!?' are also emerging.

🏢 Types of Japanese stocks to target in a mature market

So, what kind of stocks are suitable for long-term investment?

✅ High-dividend, cash-rich companies

• Mitsubishi HC Capital

• ORIX

• JT
  → Companies that consistently generate profits and have generous dividends

✅ Globally expanding types

• Nintendo, Keyence, FANUC
  → Models that capture overseas demand without relying on the domestic population

✅ Social infrastructure types

• KDDI, TEPCO, Kansai Electric Power
  → Stable companies that provide essential services for daily life

🤔 Kattobei's stance

I position Japanese stocks like this👇

• Close to daily life and easy to understand

• Yen-denominated assets with low currency risk

• Perfect for a 'grow while protecting' strategy

Of course, there are dreams in US stocks.
But, the steadiness and reliability of Japanese stocks cannot be underestimated either.

✍️ Summary: 'Japan will not grow' does not mean 'Japanese stocks are not worth buying'

Admittedly, the explosive growth of the bubble era may not come again.

However, what we salaryman investors need is,

Rather than lamenting that 'Japan will not grow,'
it is much more constructive as an investment to focus on 'how to identify companies that can generate profits within that environment'.

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