About US and Why Japan Now?

About Yuka Marosek, CFA

I am a Japanese who left Japan 30 years ago to study and to live in US. 

I have worked as an US equity analyst for a trust company  and as a Japan focused analyst for Global Investment Funds.  I also had an underwriter role for commercial banks. For the last 10 years, I have profitability day traded US stocks, and have increasingly become interested in profit opportunities which Japanese stocks/IPOs present. Small capitization market segments in Japan is replete with high quality, yet fundamentally undervalued stocks. That is, Japanese small capitalization stocks represent highly inefficient markets.

I aim to introduce you undervalued stocks are which are not value traps (cheap for a good reason), instead, inexpensive since they are not discovered by global investors.

Why Japan?

PayPal Holdings, on 9/8/21, announced an acquisition of Paidy a Japanese buy now, pay later (BNPL) service platform, for approximately $2.7 billion (300 billion yen), mostly in cash, to enhance its business in Japan (the 3rd largest ecommerce market in the world).  PayPal failed to penetrate Japan in 2014 (maybe because eBay could not establish a meaningful presence in Japan where Yahoo Japan controlled eCommerce). Then why is it  trying again?  Likely, Japan presents a large opportunity which Paypal can’t ignore.  Can you ignore profit opportunities which Japanese IPO markets offer? 

Furthermore, Japan is known to be a hard market to enter by foreign players.  Japanese are not known for their English proficiency.  This language barrier function as an entry barrier to non-Japanese entities in essence

.Japanese IPOs are a bit  unique.  Startups in Japan go public  at a much earlier state than counterparts in other countries.  Companies often access public markets to raise funds to grow their business operations.  However, in Japan, companies decide to go public in order to  raise awareness in the eyes of customers and clients.  Japanese clients tend to trust public companies more, thus, public companies can sell their services and products with more ease and confidence.  Therefore, you, as an investor, can catch a public stock at its early growth stage which is only available to private equity investors globally. 

You might say, “well. I can invest in pre-IPO shares through crowd funding sources”.  Yes, but you have to be an accredited investor with $1MM in net assets.