[Position Record] Stocks that fell due to worsening Japan-China relations: I only picked up 3 stocks

I'll start with the conclusion. Over the 6 trading days since July 28, I put a total of 31.18 million yen into 3 inbound-related stocks. And as of today, my unrealized loss is 410,000 yen. I'm still losing.

[Record] 2026 July 28 (Tue)

・09:02 Nikkei Average 412 yen. Selling pressure from the open
・09:14 Shiseido 7.2% / Mitsukoshi Isetan HD 6.8% / Laox 11.4%
・09:31 Kyoritsu Maintenance 4.1% ← Only this one is falling differently
・10:05 Bought in

Triggered by former Secretary-General Moriyama's remarks regarding diplomacy with China, tensions in Japan-China relations reignited all at once. Chinese media mentioned refraining from visiting Japan, and the next morning in the Tokyo market, inbound-related stocks were sold off across the board. Up to this point, it's something anyone could see if they opened the news.

But you know, that's not the interesting part.

Even though they are all labeled with the same 'inbound' tag, the decline range 'widened by more than double'. 11% fell, while others stopped at 4%. What creates this difference is neither diplomacy nor exchange rates. It's just the content of their sales.

2026 As of July, this is the actual measurement from my account.

I don't use the word 'actual measurement' lightly. I'm the type who hits a large-button desktop calculator rather than a smartphone calculator. It's a simple calculation of just typing price x number of shares, but if you use a calculator with small buttons, you might make a typo even once, and you'll spend a long night with the wrong digit for your unrealized loss. One you can buy for about 1,500 yen is enough; just having large buttons significantly reduces typos. This is not a place to be stingy.

[What you will learn in this article]
1. Why they were all sold off just because of the 'inbound' label
2. The worst dip-buying I did in 2020 where I lost 11.8 million yen
3. How institutions break down 'China dependence' (with a place where you can trace it all for free)
4. The entry price, number of shares, and valuation profit/loss of the 3 stocks I picked up (fully disclosed)
5. The 5 stocks I didn't pick up and the actual figures for their exclusion
6. Exit lines and the next date to watch
📌 Also recommended reading
・[Position Record] BOJ purchase request, the 3 stocks I picked up as a former interest rate desk trader
・[Pre-market Memo] Trump's 13.3% tariff, the story that it's not just auto stocks that will fall

🇨🇳 6 trading days when inbound stocks fell in unison due to worsening Japan-China relations

When I was at the desk, when geopolitical news came out, what I did first was decided. I don't look at the stocks. I look at the news. I decide first 'how many days it will last'.

This decline was the messiest on the first day. There was no selection in how they were sold. That means what was moving wasn't human judgment, but machines.

A basket bundled with the 'inbound' tag was just thrown away as is.

Index-linked selling, cancellation of thematic ETFs, and the unwinding of leveraged products. When these three come at the same time, no one looks at the sales composition. Laox and Kyoritsu Maintenance are put in the same box, and on the same day, they fall in the same direction.

This is where the individual's share comes in.

Everything is sold on the first day, and from the second to the third day, 'only stocks with different contents start to recover'. What I was watching was the speed difference in this recovery.

・July 28 (Day 1): Everything fell. Zero selection
・July 29 (Day 2): Only 3 stocks with low China dependence didn't hit the high at the open and stayed flat
・July 30 (Day 3): Laox fell another 4.9%, Kyoritsu Maintenance was +1.2%

After seeing this divergence on the third day, I added to my position.

Jumping in on the first day is for those who get taken.

💡 What you can do today: Try lining up the inbound-related stocks you currently hold in order of their decline rate. If there is a twofold difference in the decline range between the top and bottom, there is a reason for it.

If you try to do that sorting only in your head, you will definitely forget. I write down the stock names and decline rates by hand in my trading record notebook. If I use a smartphone memo, it gets buried and disappears later, but a ranking table written on paper is something I can look back at on the third day. 1,000 yen even, if a notebook that doesn't cost that much can change the probability of escaping from being the one getting taken, it's a small price to pay.

💸 The worst dip-buying that cost me 11.8 million yen in 2020

I'll start by writing about my own failures. Because a perfect account doesn't exist in this world.

February 2020. Not long after I became independent, I decided that the Japan-visit related stocks were a "temporary decline" and went to pick them up. The reason was simple: during the past SARS outbreak, stock prices had recovered in three months.

They recovered in three months. So they will recover this time too. That's what I thought.

The result was that I dumped them at a loss of 11.8 million yen.

They didn't recover. I had arbitrarily decided that the duration of the news would be three months. In reality, the borders themselves closed, and the number of visitors to Japan dropped to 99% less than the previous year. I applied past patterns to the present. That was the extent of my failure.

I still remember my hands shaking when I looked at the numbers on my brokerage app the night I cut my losses. I was so frustrated I could cry.

The only thing I changed after that was one thing.

"I stopped buying news and started buying sales composition"

No one knows when diplomatic news will end. But "what percentage of this company's sales comes from China" is a number that is fixed at this very moment today.

I stopped betting on things I don't understand and started betting only on things I do understand.

The idea that helped me grasp this shift the most at the time was choosing stocks based on where the business's cash flow comes from. "The Future for Investors" (Siegel), which breaks down where past returns were generated using actual data, is good for breaking the habit of buying based on themes.

🔍 China dependency under 20%: Where did I draw this line?

This is probably the part you want to know the most.

First, you don't need to look at brokerage reports. The materials I used this time are all things you can read for 0 yen. I haven't bought even 1 yen worth of paid information.

What institutions are looking at isn't the pretty pages of the earnings summary.

It's the back part of the Annual Securities Report. The table called "Sales by Region" within the "Segment Information." Here, the amounts are listed divided into Japan/China/Other Asia/North America. Some companies release this quarterly, while others only release it once a year.

Honestly, I've seen many people give up just on how to read this table. If you aren't used to looking at rows of numbers, you end up closing it without knowing where to look. That's why I keep Introduction to Reading Financial Statements on hand. It uses diagrams to show where the segment information table is and what you should look at first. For around 1,500 yen or so, if you read just this one book, you won't get lost in the regional sales tables.

And you can read all of this for free on a site called EDINET. It's a public disclosure system operated by the Financial Services Agency. The source material for the documents that brokerage salespeople say "use our report for" is usually here.

If you don't know this, you'll end up paying tens of thousands of yen a year for reports.

However, this is where many people stop. They just look at "sales by region" and finish there.

For inbound-related stocks, that's incomplete. There are two reasons.

・First: Even if a company doesn't have stores in China, there are companies where the ratio of Chinese tourists to domestic sales is high (duty-free shops and department stores fall into this category). ・Second: In consolidated regional sales, "Hong Kong and Taiwan" are sometimes listed separately from China, and if you don't add them together, you won't get the true dependency level.

That's why I add the two figures together to create a single score. The sales ratio in mainland China and the estimated ratio of domestic sales accounted for by Chinese visitors to Japan. I only picked up those with a composite value of less than 20 points.

I will provide the calculation formula itself and the actual figures for the 5 stocks in the paid section below.

Over 6 trading days, I executed in 12 separate batches. When you split it up, the commission per trade starts to add up. I split them not to try and hit the mark, but to ensure I can withdraw if I'm wrong. If I had put everything in at once and been wrong, this ▲410,000 yen loss would surely have been a much deeper figure.

💎 What you get in the rest of this (paid section) ✅ A full public data table of the 3 stocks' entry prices, share counts, investment amounts, and unrealized gains/losses ✅ The "China Dependency Score" calculation formula and a quick-reference judgment table you can use as-is ✅ The exclusion reasons and actual figures for the 5 stocks I didn't pick up (why I passed on Laox) ✅ The 3-piece set of stop-loss line / primary profit-taking line / holding period ✅ A 7-item pre-check list to look at before buying. Which ones would you pick up in this downturn? Let me know in the comments, whether it's the stock name or the sector. If even one overlaps with my 3 stocks, we're probably looking at things from a similar perspective.

From here on, I will show you all the positions I actually took and the content of my judgment criteria.