​Many sell-side broking firms continue to intensify their focus on large cap stocks because they are stuck in the mindset that higher liquidity drives their turnover (exacerbated by commission compression), despite ignoring buy-side client requests that being the 20th analyst on a stock adds no value to their investment process. At Analogica KK we understand there is an ever widening gap between the buy and sell-side and we are filling the void.

Analogica KK's sole independent stock research focus is to look to the thousands of uncovered and undiscovered small-mid cap companies in Japan which are taking advantage of decades of staid business practice conducted by long time revered large cap companies. While small-mid cap coverage is very limited in the Japanese market we believe that experience is also a must to find emerging leaders. Analogica KK also researches thematics, politics, geopolitics and structural change and the impacts to industry.

Japan's misguided Matryoshka M&A

​In the last 25 years, Intel Corp on its own has managed to make 31% more net income than all 20 of Japan’s largest tech companies combined on a currency adjusted basis. That is right. Intel on its own has thumped the likes of Sony, Panasonic, Toshiba, Sharp, Mitsubishi Electric, NEC, Hitachi, Fujitsu, Fuji Film, Konica Minolta, Brother, Nidec, Kyocera, Canon, Olympus, TDK, TEL, Ricoh, Advantest and Nikon combined. Intel does one thing very well, commands huge market shares and ensures its product is needed in pretty much most electronic devices that matter. Still many Japanese electronics com...

Elections, Polls, Terrorism and Financial Market Behaviour

​MIT economist Jonathan Gruber’s candour shocked many when he said that Obamacare could only be passed into legislation if it was “written in a tortured way” so it could play to the “stupidity of the American voter.” While politicians on both sides of the political divide were quick to support the ‘intelligence’ of their constituents the reality today is that ‘actual’ voter turnout across the globe, including America has been steadily falling over the last six decades and the incidence of informal (‘donkey’) votes has been surging. Even countries like Australia which has mandatory voting has s...

The problem with all-you-can-eat ETFs in Japan

​ETFs are hitting the market faster than the dim-sum trolley can circle the banquet hall. Charles Schwab, in the 12 months to July 2015, saw a 130-fold preference of ETF over mutual funds given their relative simplicity, cost and transparency. It sure sounds good but for all the exotic flavours of ETFs one can feast on, one needs to be wary of indigestion when stomaching bear claws. To show what an upset bear is capable of - the most recent stock market rout from Aug 17th, 2015 - stocks which had a higher percentage of ETF ownership suffered greater underperformance than those with less. The c...

ETF Behaviour in Bear Markets

​Assets invested in ETF/Ps comprise around $3 trillion globally. Put simply the new funds flowing into ETFs vs. traditional mutual funds is at a 100:1 ratio and in terms of AUM is on par with total hedge fund assets which have been in existence for 3 times as long. Although ETF products have been around for a quarter of a century, they have only really started to become meaningful since Lehman Shock. However ETFs, despite increasing levels of sophistication, have brought about higher levels of market volatility. Studies have shown that a one standard deviation move of S&P500 ETF ownership carr...

Corporate Governance in Japan (日本語版)

​安倍首相はアベノミクスの一環として、日本の企業に対し海外のコーポレート・ガバナンスを手本とした日本独自のコーポレートガバナンスコード(以下コード)の導入を推進している。時期としては遅い感は否めないし、不十分ではあるが、投資家はとりあえずその導入を歓迎した。日本は自国に必要なコードに注力するのは正しいということは認めざるを得ない。先ず、完璧なコーポレートガバナンスコードはない。一般にSOXと呼ばれる米国の上場企業会計改革および投資家保護法(SOX)を例としよう。SOXは、2002年に導入された際、ワールドコム、エンロン、タイコ等が起こしたスキャンダルを踏まえた上で、ボードルームのさらなる独立性を通して、株主、企業コンプライアンス、規律的行動を義務化した。しかしながら、他のコードと同様に効果的ではなかった。独立したボードルームの導入により、投資家はむしろ多大な損害を被ってしまったのである。そのような例は、世界金融危機(GFC), ヒューレット・パッカード, テスコ, ペトロ・ブラス, ペン・ウエスト, ヘルス・サウス, パーマラット, GSKなど、枚挙にいとまがない。従って、この日本の新しいコードを海外の評論家に非難される筋合いはない。第一に、日本のコードはSOXと違い、監視に重きを置いていない。これが重要な違いである。ボードルーム内外における信頼関係を構築することが最良のコーポレー...

Japan's misguided Matryoshka M&A

​In the last 25 years, Intel Corp on its own has managed to make 31% more net income than all 20 of Japan’s largest tech companies combined on a currency adjusted basis. That is right. Intel on its own has thumped the likes of Sony, Panasonic, Toshiba, Sharp, Mitsubishi Electric, NEC, Hitachi, Fujitsu, Fuji Film, Konica Minolta, Brother, Nidec, Kyocera, Canon, Olympus, TDK, TEL, Ricoh, Advantest and Nikon combined. Intel does one thing very well, commands huge market shares and ensures its product is needed in pretty much most electronic devices that matter. Still many Japanese electronics com...

Elections, Polls, Terrorism and Financial Market Behaviour

​MIT economist Jonathan Gruber’s candour shocked many when he said that Obamacare could only be passed into legislation if it was “written in a tortured way” so it could play to the “stupidity of the American voter.” While politicians on both sides of the political divide were quick to support the ‘intelligence’ of their constituents the reality today is that ‘actual’ voter turnout across the globe, including America has been steadily falling over the last six decades and the incidence of informal (‘donkey’) votes has been surging. Even countries like Australia which has mandatory voting has s...

The problem with all-you-can-eat ETFs in Japan

​ETFs are hitting the market faster than the dim-sum trolley can circle the banquet hall. Charles Schwab, in the 12 months to July 2015, saw a 130-fold preference of ETF over mutual funds given their relative simplicity, cost and transparency. It sure sounds good but for all the exotic flavours of ETFs one can feast on, one needs to be wary of indigestion when stomaching bear claws. To show what an upset bear is capable of - the most recent stock market rout from Aug 17th, 2015 - stocks which had a higher percentage of ETF ownership suffered greater underperformance than those with less. The c...

ETF Behaviour in Bear Markets

​Assets invested in ETF/Ps comprise around $3 trillion globally. Put simply the new funds flowing into ETFs vs. traditional mutual funds is at a 100:1 ratio and in terms of AUM is on par with total hedge fund assets which have been in existence for 3 times as long. Although ETF products have been around for a quarter of a century, they have only really started to become meaningful since Lehman Shock. However ETFs, despite increasing levels of sophistication, have brought about higher levels of market volatility. Studies have shown that a one standard deviation move of S&P500 ETF ownership carr...

Corporate Governance in Japan (日本語版)

​安倍首相はアベノミクスの一環として、日本の企業に対し海外のコーポレート・ガバナンスを手本とした日本独自のコーポレートガバナンスコード(以下コード)の導入を推進している。時期としては遅い感は否めないし、不十分ではあるが、投資家はとりあえずその導入を歓迎した。日本は自国に必要なコードに注力するのは正しいということは認めざるを得ない。先ず、完璧なコーポレートガバナンスコードはない。一般にSOXと呼ばれる米国の上場企業会計改革および投資家保護法(SOX)を例としよう。SOXは、2002年に導入された際、ワールドコム、エンロン、タイコ等が起こしたスキャンダルを踏まえた上で、ボードルームのさらなる独立性を通して、株主、企業コンプライアンス、規律的行動を義務化した。しかしながら、他のコードと同様に効果的ではなかった。独立したボードルームの導入により、投資家はむしろ多大な損害を被ってしまったのである。そのような例は、世界金融危機(GFC), ヒューレット・パッカード, テスコ, ペトロ・ブラス, ペン・ウエスト, ヘルス・サウス, パーマラット, GSKなど、枚挙にいとまがない。従って、この日本の新しいコードを海外の評論家に非難される筋合いはない。第一に、日本のコードはSOXと違い、監視に重きを置いていない。これが重要な違いである。ボードルーム内外における信頼関係を構築することが最良のコーポレー...

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