Japan’s ‘Magnificent Seven’ Stock Basket That Have Stood the Test of Time
Analysts from Goldman Sachs Group Inc. sparked curiosity in Tokyo with a report pinpointing a selection of stocks poised as Japan’s answer to the mighty ‘Magnificent Seven’ that rule the US stock market. This elite group includes Toyota Motor Corp, Subaru Corp, Mitsubishi Corp, alongside semiconductor giants such as Screen Holdings Co, Advantest Corp, Disco Corp, and Tokyo Electron Ltd.
Yet, the concept of the ‘Magnificent Seven’ extends beyond stock performance, embodying the essence of the US market. From the global reign of Apple Inc. to the frenzied enthusiasm around Tesla Inc., these giants represent not just financial success but market symbolism that certain large firms like Berkshire Hathaway Inc. don’t quite capture.
Drawing inspiration from Akira Kurosawa’s ‘Seven Samurai’—the original masterpiece that inspired The Magnificent Seven—a deeper narrative unfolds, showcasing the resilience and lasting value of Japanese enterprises. These corporations may not always grab headlines but often turn out as lucrative long-term investments, an opinion possibly shared by Warren Buffett.
So, who truly constitutes Japan’s ‘Seven Samurai’ of the stock market? Here’s a fresh perspective away from the usual analytics, focusing on what these companies signify about the contemporary Japanese business scene and their enduring success.
- Toyota Motor Corp: An emblematic powerhouse, Toyota recently soared to a market capitalization above ¥50 trillion ($333 billion), showcasing a successful hybrid vehicle strategy amidst the electric vehicle revolution. Toyota exemplifies practical wisdom and leadership, resonating with Kambei Shimada, the seasoned leader among the samurai.
- Nintendo Co: The epitome of Japanese cultural influence and resilience, Nintendo has proven its critics wrong by excelling in both hardware and software through its Switch console. Like Shichiroji, the beloved and formidable samurai, Nintendo balances stakeholder interests with strategic foresight.
- SoftBank Group Corp: Much like the flamboyant yet determined samurai, Kikuchiyo, SoftBank has faced its share of skepticism. Despite some high-profile investment missteps, its enduring faith in artificial intelligence may yet vindicate its bold, forward-looking vision.
- Keyence Corp: Revered for its high operating profit margins and innovation in industrial automation, Keyence remains an enigmatic force in the market, reminiscent of the skilled and taciturn samurai, Kyuzo.
- Sony Group Corp: Sony’s journey of reinvention across varied industries mirrors the strategic depth and versatility of Gorobei Katayama, the samurai’s astute strategist and deputy leader.
- Mercari Inc: Representing Japan’s vibrant startup ecosystem, Mercari’s success in overseas markets casts it as Katsushiro Okamoto, the young apprentice eager to prove his worth.
- Recruit Holdings Co: From humble beginnings to a domination in internet services, Recruit’s story of growth and international success aligns with Heihachi Hayashida, the resourceful ronin with a knack for survival and adaptation.
As Japan’s Nikkei 225 index teeters on the brink of historical highs, it’s crucial to remember—much like in ‘Seven Samurai’—not all heroes make it to the finale. As the story teaches us, “Danger always strikes when everything seems fine.” This adage serves as a reminder of the volatility and unpredictability inherent in the stock market, underscoring the importance of caution and resilience in the face of potential downturns.
