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

Seiji Watanabe’s fascination with the dynamism of stock trading helped him rise to a senior position at Nomura Securities Co., Japan’s largest securities house, overseeing sales of Japanese stocks to institutional investors.

His deep knowledge of Japanese stocks even made him a go-to person for many money managers around the world seeking advice on investing in companies such as 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 its relative lack of enthusiasm for investing that stock trading can be a worthwhile endeavor, offering no not just personal financial rewards but, in his view, profits. also for society.

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

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

His first reaction to images on the news showing a giant tsunami turning coastal cities into rubble, he recalled, was to wonder, “What stocks are going to go up next week?”

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

He began to see stocks not only as a means of making money, but as a way to help grow businesses that provide needed goods and services and maintain employment. That led him to see his role as helping direct the flow of money in ways that could help the Japanese economy, he said.

After serving as CEO at Nomura, he left the company and launched Million Eyes Co. in 2016, a for-profit investment school that focuses on training self-reliant individual investors.

His idea is to tap into more than ¥1 trillion in savings in the country to drive a shift toward investment. A significant shift would pour funds into promising large-scale businesses, helping to revive Japan’s economy and ultimately benefit investors, he said.

The Japanese public keeps much more of their financial assets in savings than their counterparts abroad. According to the Bank of Japan, cash and deposits accounted for 54.3% of Japanese household financial assets in March 2022, compared with 13.7% in the United States and 34.5% in Europe.

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

Watanabe’s idea dovetails with Prime Minister Fumio Kishida’s policy goal of reviving Japan’s economy through investment, but financial reasons alone are not enough to convince 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 investment like making an offering at a shrine. If you have an altruistic mind, it will eventually come back to you like the folk tales.”

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

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

One day in September this year, he achieved the extraordinary feat of finishing his 100th issue of Kaisha Shikiho since he began reading it under the guidance of his senior colleague in 1997.

“I started reading it because I was afraid of it,” Watanabe said. “But I have come to understand the Japanese economy, and even the world economy better, because of her. She has really enriched my life.”

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

“Mr. Watanabe sometimes shows us the signs of change in Japanese companies that even we are not aware of,” said Naoki Yamamoto, manager of Toyo Keizai Inc.’s Kaisha Shikiho Center. “He’s our ideal reader.”

The school, called Fukugan Keizai Jyuku, has attracted more than 3,500 students so far, with about half of them in their 30s and 40s. Women made up about 30 percent of the total.

Watanabe says the school’s stance of focusing not only on investment advice but also on business history and corporate philosophies may have helped attract people traditionally less interested in investing, such as young and women

His students are often surprised at how they are surrounded by so many listed companies in their daily lives without even knowing it. For example, Hyojito Co. exclusively manufactures map boards in train stations, while Suminoe Textile Co supplies red carpets to the Diet of Japan.

“I’ve developed the habit of thinking about investing as something related to my work,” said Toshiko Amagasa, a student at the school who works in the restaurant industry. “The school really changed the way I looked at things,” he said.

The key to success is to invest in companies the same way you would invest in a child, Watanabe said.

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

AND KYODO

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