In today’s briefing:
- Is the Nikkei 225 the Next Shoe to Drop?
- A Belated Look Back at Our 2020 and 2021 Conviction Calls and a Look Ahead to 2022
- Toyota – 11m Unit Production Target Is a Positive Surprise
- Japan’s Governance: About the Article on the Limited Information Disclosure Published in English
- Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility
Is the Nikkei 225 the Next Shoe to Drop?
- Key levels are under threat on the Nikkei 225 at 26,954
- A close below there would amount to a notable break
- We may be on verge of a multi week decline towards sub 25k
A Belated Look Back at Our 2020 and 2021 Conviction Calls and a Look Ahead to 2022
- In 2020 and 2021 we had nine conviction calls, four of which returned over 50% within just over a year.
- Three more returned close to 40%, one returned 15% and just one was an abject failure returning -39%.
- On average, alpha generation was 24.3% and our 2022 names are off to a good start putting up 14.7% in alpha in just over a month and a half.
Toyota – 11m Unit Production Target Is a Positive Surprise
- The Nikkei is reporting that Toyota has set internal production targets of 11m units for the fiscal year ending March 2023.
- That would imply a more than 20% YoY increase in production volumes.
- And that in turn is very positive news not just for Toyota but for several other auto-related names.
Japan’s Governance: About the Article on the Limited Information Disclosure Published in English
- An article in Nikkei reported that “Of the 1,840 companies listed on the prime market, 230, or 13%, published their Annual Securities Reports published in English.
- The disclosure of Annual Securities Reports and Corporate Governance Reports in English has been terribly slow. These reports were disclosed in English would greatly help foreign investors understand individual companies.
- These reports, which contain information necessary for the valuation of a company, in English will be difficult to achieve until they become mandatory or are specifically designated as documents.
Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility
- Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger.
- This was largely expected but does deprive Softbank of a source of cash to conduct its buyback.
- It also highlights the overall negative environment for Softbank’s traditional business “strategy”.
Before it’s here, it’s on Smartkarma
