Ex-Nomura executive opens school to shift Japan’s savings into stocks

Seiji Watanabe’s fascination with the dynamics of stock trading helped him rise to a senior position at Nomura Securities Co, Japan’s largest securities firm, where he oversaw the sale of Japanese stocks to institutional investors.

His in-depth knowledge of Japanese equities even made him a go-to resource for many money managers around the world seeking advice on investing in companies like Toyota Motor Corp and SoftBank Group Corp.

But in his late 40s, Watanabe turned to a harder sell – trying to convince a Japanese public, known for their relatively low enthusiasm for investing, that stock trading can be a worthwhile endeavor that offers more than just personal financial rewards , but in his opinion also benefits for society.

A native of Toyama Prefecture in central Japan, Watanabe began his career as a sales representative at a Nomura store in Tokyo’s high-end Ginza shopping district and quickly developed a passion for picking winners in the markets.

However, his view of his career was shaken when a massive earthquake and tsunami struck northeastern Japan in March 2011, leaving around 16,000 dead and more than 2,500 missing.

He recalled that his first reaction to news footage showing a huge tsunami razing coastal cities to rubble was to ask himself, “Which stocks will rise next week?”

“Then I thought, ‘What am I thinking?'” said Watanabe, 55, in an interview. “It felt like I was unbrainwashed. That was a turning point.”

He began to see stocks not just as a way to make money, but also as a way to help businesses grow that provide necessary goods and services and sustain jobs. That prompted him to see his role in directing the flow of money in ways that could help the Japanese economy, he said.

After serving as CEO at Nomura, he left and founded Million Eyes Co. in 2016, a for-profit investment school focused on educating self-sufficient individual investors.

His idea is to unlock more than 1,000 trillion yen in savings in the country to drive a shift toward investment. A significant momentum would inject large amounts of money into promising companies, which would help revitalize Japan’s economy and ultimately benefit investors, he said.

The Japanese public keeps a much larger portion of their financial wealth in savings than their overseas counterparts. According to the Bank of Japan, cash and deposits accounted for 54.3 percent of Japanese household financial assets as of March 2022, compared to 13.7 percent in the United States and 34.5 percent in Europe.

In contrast, stocks in Japan accounted for just 10.2 percent of the total, compared to 39.8 percent in the United States and 19.5 percent in Europe.

Watanabe’s idea is consistent with Prime Minister Fumio Kishida’s policy goal of reviving the Japanese economy through investment, but financial motives alone are not enough to persuade risk-averse Japanese to buy stocks, he said.

“It’s ingrained in our DNA that if you pursue greed, you will be punished,” Watanabe said. “Rather, we should think of investing as making an offering at a shrine.

To help his students develop a keen eye for good companies, Watanabe encourages them to carefully read “Kaisha Shikiho” (Companies Quarterly), a quarterly phone book investment guide that contains financial information on all of the more than 3,800 public companies in Japan.

Though it’s considered Japan’s investment bible, even professional investors rarely read the tome, which is more than 2,000 pages, cover to cover, he said. But Watanabe has done so for the past 25 years.

On a day in September this year, he accomplished the extraordinary feat of completing his 100th edition of Kaisha Shikiho since he began reading it in 1997 at the direction of his senior colleague.

“I started reading it because I was scared of him,” Watanabe said. “But it gave me a better understanding of the Japanese economy and even the world economy. It has really enriched my life.”

By studying each page of the book over many years, readers can identify slight changes in the economy, such as B. new business trends and how government policies like tax increases affect companies, which will help them find the next Toyota or Sony, he said.

“Mr. Watanabe sometimes teaches us the signs of change in Japanese companies that even we don’t know,” said Naoki Yamamoto, manager of the Kaisha Shikiho Center at Toyo Keizai Inc. “He is our ideal reader.”

Dubbed Fukugan Keizai Jyuku, the school has so far attracted more than 3,500 students, about half of whom are in their 30s to 40s. Women made up about 30 percent of the total.

According to Watanabe, the school’s attitude of focusing not only on investment advice but also on the history and business philosophy of companies may have helped attract people who are traditionally less interested in investing, such as young people and women.

His students are often surprised how they are surrounded by so many public companies in their daily lives without even knowing it. For example, Hyojito Co. exclusively makes train station map panels, while Suminoe Textile Co supplies red carpets to Japan’s state legislature.

“I’ve gotten into the habit of looking at investing as something related to my job,” said Toshiko Amagasa, a student at the school who works in the restaurant industry. “School really changed my perspective on things,” she said.

The key to success is investing in businesses like a kid, Watanabe said.

“You invest in a company because you just want to support it,” he said. “If everyone did that, the Japanese economy would change.”

© KYODO

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