It is June 2026, and the financial laws of gravity are completely breaking down across two different hemispheres.

The US stock market has reached valuations that defy all historical sanity. The S&P 500 is currently sitting at a massive 41.6 on the Shiller P/E. As a refresher, this metric smooths out the normal ups and downs of the economy by looking at ten years of profits instead of just one. In plain English, a 41.6 ratio means investors are paying nearly $42 today for every $1 of profit those companies averaged over the last decade.

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To understand how insane that is, you have to look at 140 years of market data. The current valuation is more than twice the long-run historical average of 17.3. We have officially blown past the infamous 1929 peak of 32.6, which preceded the Great Depression. We even crushed the post-pandemic stimulus peak of 38.6. There is only one single moment in the entire history of American capitalism when stocks were more expensive than they are today. That was December 1999, right at the peak of the dot-com bubble, when the Shiller P/E hit 44.19.

Meanwhile, over in Japan, I am seeing a totally different milestone. The Nikkei 225 just broke 65,000 and hit an intraday all-time high of 66,428.81 in late May 2026. Japan spent over three decades trapped in the shadow of its own legendary crash. But unlike the current American market, Japan’s rally is not built on speculative AI euphoria. Japan’s CAPE ratio (Shiller P/E) is sitting at a quite reasonable 29.38. That is elevated globally, but it is nothing like the hallucinatory valuations Japan saw during its 1989 ultra-bubble, when their CAPE approached 100.

The American AI bubble is delusional

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Prime Minister Sanae Takaichi secured a massive supermajority in the February 2026 elections by reading the room.

Her winning message?

Revitalize the economy, strengthen national defense, and above all, enforce a hard cap on immigration.

This bears an eerie resemblance to "Sakoku 2.0", a term popularized during the Covid-19 pandemic referencing Japan's his…

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The numbers are so large they almost lose their meaning. We are looking at a nominal gross domestic product of roughly 665 trillion yen as of 2025, stacked against a gross government debt of 1,342 trillion yen. Depending on the metric, the government debt-to-GDP ratio sits between 230% and a …

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It takes a profound lack of self-awareness for a politician to govern over three decades of wage stagnation and then act shocked when young people stop spending money.

During a recent Diet session, Finance Minister Satsuki Katayama clutched her pearls over a newly coined phenomenon sweeping the nation: NISA Poverty (NISA貧乏).

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I was recently scrolling through videos of China’s newest automotive assembly lines, and honestly, it’s scary. I was looking at so-called “dark factories”, facilities like those operated by Xiaomi and BYD. They are so thoroughly automated they can operate in the dark, with basically zero human interaction, and a completed car rolls off the line every 10…

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Japan Inc. is facing a demographic time bomb.

The scale of what is happening to Japan’s corporate landscape is truly terrifying:

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Japan is frequently associated with lifetime employment, strict corporate hierarchies, and decades of stagnant wages. However, there are companies that definitely brea…

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My recent report on Takashi Kotegawa,

,became one of my most shared articles ever.

In this video, I go deeper into the technical side of his “25-Day Moving Average Divergence” strategy that I outlined in the text. I break down the specific charts from the 2005 crash and the 2008 Lehman shock to show you exactly where he bought when everyone else was selling.

I am trying something new today. I will put a claim I’ve heard time and time again to the test: The AI boom is hoarding all the me…

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I have tasked myself with finding the greatest investor in Japan, and the search did not take long.

While there are others who have achieved fame in the retail space, most notably the brash and vocal CIS, there is only one undisputed god of the Japanese investing scene.

His name is Takashi Kotegawa, but the financial world knows him simply as B.N.F.

He is the man who turned his student savings of roughly 1.6 million yen into a fortune exceeding 30 billion yen ($272 million).

That’s a 1,874,900% total return!

He is the man who managed to make over 2 billion yen ($18.2 million) in 10 minutes during the most infamous trading mistake in Tokyo Stock Exchange history.

He is the man who bought a commercial building in Akihabara with cash simply because he had run out of things to do with his money.

Kotegawa grants almost no interviews. He has no social media presence. He does not sell courses. He does not want your money. He wants only to trade.

And to understand his life since he went silent in 2020, I have compiled the available traces of his career: Old 2-chan forum posts, his few media appearances from 2006, public tax records, and the analysis of the Japanese trading community.

This report is his story….

Part I: The Death of the Salaryman

To understand Kotegawa, I must first paint the picture of the Japan he emerged from.

The year was 2000. The world’s biggest bubble had burst a decade prior, and the Nikkei 225 was a graveyard of optimism. The great Japanese dream of the salaryman, a stable, respectable career with lifetime employment that had underpinned the social contract since 1945, was dying. Japan was sliding into the deflationary abyss that would come to define its “Lost Decades.”

For the generation coming of age in the late 1990s, the corporate ladder looked less like a path to security and more like a trap. The “shinjinrui” (new breed) of young Japanese were disillusioned. They saw their fathers sacrifice their lives for corporations that were now discarding them. They looked for an escape.

The Digital Big Bang

However, a quiet revolution was taking place beneath the surface of this economic stagnation. The Japanese government, desperate to revitalize the financial sector, executed the “Financial Big Bang.” A critical component of this was the liberalization of brokerage commissions in October 1999.

Before this moment, trading stocks was a rich man’s game. It was gated by high fees and telephone orders. You had to call a broker. You had to pay a significant percentage of your trade execution. It was slow. It was inefficient. It was exclusive.

Suddenly, online brokers like Matsui Securities, Rakuten Securities, and E*Trade Japan emerged. They offered low latency and, crucially, low commissions. They opened the gates of the Tokyo Stock Exchange to the general public.

It was the dawn of the “Net Trader.” Thousands of young men retreated to their bedrooms. They armed themselves with PCs and high-speed internet connections.

They were the first generation to see the market not as a mechanism for capital allocation, but as a massive multiplayer online game played for real money.

Takashi Kotegawa was one of them.

Part II: The Birth of B.N.F.

Takashi Kotegawa was born on March 5, 1978, in Ichikawa, Chiba Prefecture. His background is aggressively ordinary. This is important. No math prodigy from a prestigious academy. No heir to a financial empire. He was a student at Nihon University, an average university at best, enrolled in the Faculty of Law.

In a parallel universe, Kotegawa graduates. He passes the bar. He becomes a salaryman lawyer. He works 14-hour days for a steady paycheck. He commutes on the Tozai Line. He retires at 65.

In this universe, he found the stock market.

The year was 2000. Kotegawa was 21 years old. He had saved approximately 1.6 million yen (roughly $13,000 at the time) from rigorously saving money from his part-time jobs.

The Victor Niederhoffer Connection

Hooked by the relentless ad campaigns of the new internet trading era, Kotegawa entered the market just as a historic downturn began. The US Dot-com bubble had just burst, and it evaporated trillions of dollars in wealth, creating a global contagion that dragged the Nikkei down to levels not seen in nearly twenty years.

While panic selling turned the markets into a slaughterhouse, Kotegawa quietly opened his account.

Needing a handle for the internet forums where traders gathered to share ideas, he chose “B.N.F.” It was a phonetic error; he intended to use “V.N.F.” to honor Victor Niederhoffer, but because the Japanese language treats “V” and “B” almost identically, the misspelling stuck.

The choice was telling. Niederhoffer was an eccentric American squash champion and George Soros partner, but his edge was purely statistical. He believed that markets followed strict statistical rules, specifically, that if an asset price deviated too far from the average, it was mathematically bound to snap back. This approach made him one of the most successful fund managers on Wall Street.

But in 1997, the math stopped working. Niederhoffer bet heavily that the Thai market had fallen too far and had to rebound. It didn’t. In a single day, his fund was wiped out. He lost $130 million in equity, erased his clients’ savings, and was eventually forced to auction his personal art collection just to pay the bills.

Now why would a young student name himself after a man who lost it all?

I believe Kotegawa saw the distinction between the method and the execution. He adopted Niederhoffer’s core philosophy: Buying the panic dip because the math says it must bounce, but he treated the 1997 crash as the ultimate lesson in risk management: Do not trade on borrowed money!

By the time his graduation approached in 2001, the ¥1.6 million ($13,000) he had scraped together from years of part-time work had ballooned to ¥61 million (~$500,000). That represents an explosive 3,712% portfolio growth in just a single year.

He calculated that the opportunity cost of finishing school was simply too high. Every hour in a law lecture was costing him millions. So, with only a few credits remaining, he decided to drop out.

Part III: The Art of Catching Falling Knives

I have analyzed hundreds of trading strategies. Most are absolute nonsense. They are rigged to look perfect on past data just to hook gullible subscribers. Kotegawa’s is different.

It is brutally simple. It is also psychologically impossible for 99% of people to execute.

Kotegawa’s Trading Strategy

Kotegawa made his initial fortune between 2000 and 2004. These were dark years for Japanese equities. The Nikkei 225 slid from 20,000 to under 8,000.

Most retail investors try to pick bottoms based on hope. They buy a stock because it has fallen 50% and they think “it cannot go lower.”

It usually goes lower.

Kotegawa inverted this logic. He did not buy because he liked the company. He bought because the selling was emotional. He waited for the selling to reach a mathematical breaking point, measured by the 25-day Moving Average Divergence (kairi-ritsu in Japanese).

Think of the 25-day Moving Average (MA) as a rubber band. When the price pulls too far away from this average, it stretches tight. Eventually, it has to snap back.

The Sector Rules

Kotegawa knew one number didn’t fit all. A utility stock doesn’t stretch like a tech stock. Through obsessive watching, he found the “snap point” for every industry.

Based on his old posts, these were his rough rules (measured against the 25-day MA):

• Pharmaceuticals: Buy at a 5–10% drop.

• Electric Appliances: Buy at a 10–15% drop.

• Food / Retail: Buy at a 15–20% drop.

• Tech / Internet: Buy at a 20–30% drop.

• Speculative / Penny Stocks: Buy only after a 30–50% drop.

When a stock crashed past these lines, Kotegawa struck. He was catching falling knives.

But the genius wasn’t the entry; any fool can buy a crash. The genius was the exit.

As soon as the stock bounced, often just 2% or 3%, he sold. He didn’t wait for a full recovery to the moving average. He grabbed the “dead cat bounce” and got out.

He repeated these small wins thousands of times.

By the end of 2004, he had made his first billion yen (¥1.1 billion, or roughly $10 million). He had turned his starting cash into a 690x return.

Part IV: How to Make Two Billion in Ten Minutes

Every superhero has an origin story. Every trader has a defining trade.

For George Soros, it was breaking the Bank of England.

For Takashi Kotegawa, it was the Mizuho “Fat Finger” error of December 8, 2005.

This event is the reason I am writing this biography. It is the moment Kotegawa transcended from “successful day trader” to “national legend.”

The Error

The date was December 8, 2005. J-Com Co., Ltd., a recruitment service company, was listing on the “Mothers” (small-cap) board of the Tokyo Stock Exchange. It was supposed to be a routine IPO.

At 9:27 AM, a trader at Mizuho Securities received an order from a client to sell 1 share of J-Com for 610,000 yen.

The trader made a typographical error. It was a simple slip of the keyboard. He entered an order to sell 610,000 shares for 1 yen.

The computer system at the Tokyo Stock Exchange did not catch the error. There were no circuit breakers for this specific type of volume discrepancy at the time. The order went live.

To put this in perspective, J-Com only had 14,500 outstanding shares. Mizuho had just offered to sell forty-two times the entire existence of the company for less than a penny per share.

The Recognition

The stock price collapsed instantly.

Most traders stared at their screens in confusion. Was it a system glitch? Was the company bankrupt? Was it a fraud? Fear paralyzed the market.

Kotegawa did not freeze. He saw the anomaly. He did not know why it was happening, but he knew the math was impossible. He knew that 610,000 shares could not exist.

He bought.

He bought with both hands. He bought 7,100 shares.

Remember, there were only 14,500 shares in existence. Kotegawa had just purchased nearly half of the company’s float in a matter of seconds.

Other sharks began to circle. The famous Japanese day-trader CIS, Kotegawa’s friend and rival, also bought, securing about 3,300 shares.

Between them, these two kids in their bedrooms now owned the majority of a newly listed public company.

The Exit

Mizuho Securities realized the error. Panic ensued on the trading floor. They tried to cancel the order. The Tokyo Stock Exchange system did not allow the cancellation because their technology was so outdated. The order stood.

Desperate to cover the short position they had accidentally created, Mizuho began buying back the shares at any price. They had to close the hole they had dug.

The price rocketed.

Kotegawa sold. He dumped his shares into the frantic buying pressure of the very bank that had caused the crash.

By the end of the day, Kotegawa had netted a profit of approximately 2.2 billion yen (roughly $20 million).

He did this in roughly ten minutes

The Aftermath

The incident became known as the “J-Com Shock.” It cost Mizuho Securities roughly 40 billion yen. The head of the Tokyo Stock Exchange eventually resigned. It was a national scandal.

Kotegawa, however, was the face of the incident. The media dubbed him “J-Com Man.” He was 27 years old. He had made more money in ten minutes than the average Japanese worker earns in ten lifetimes.

When asked about it later, he simply said that he was “lucky” and that “anyone could have done it”.

This is false humility. Thousands of professionals saw the same screen. Only Kotegawa acted with that size and speed. He had prepared his mind for years to recognize anomalies, and when the biggest anomaly in history appeared, he did not hesitate.

Part V: The Curse of Scale

By 2008, Kotegawa’s assets had ballooned to over 21 billion yen (approx. $200 million). He was one of the wealthiest individuals in Japan, and he was still under 30.

The Problem of Scale

Success brings its own problems. When you have 100 million yen, you are a speedboat. You can enter and exit trades instantly. When you have 20 billion yen, you are an oil tanker.

Kotegawa began to move the market. If he tried to buy a small-cap stock, his own buying pressure would drive the price up, destroying his entry price. If he tried to sell, he would crash the stock.

He was forced to trade only the most liquid large-cap stocks: Softbank, Toyota, Nintendo, and the mega-banks. He had to lengthen his holding periods. He couldn’t snatch quick pennies anymore. He had to hold stocks for days.

What is so funny about his trading strategy is that he had zero interest in the actual businesses. In a rare TV interview, He admitted he had no clue what the companies he traded actually did, nor did he care about their earnings guidance. His only reality was the line on the chart.

Part VI: The Lifestyle of a Monk

Most billionaire biographies are catalogues of excess: yachts, vineyards, and private jets. Kotegawa’s list is blank.

This is the “quirk” that makes him a cult figure in Japan. In a culture that prizes humility, he is the monk of the market.

He has exactly one indulgence: A 400 million yen condo in Tokyo.

Yet, visitors (the few television crews who were allowed in around 2006) reported that the apartment was practically empty. There was no art on the walls. No designer furniture. Just the trading station with its multiple monitors.

Allegedly, he did buy his parents a Toyota Crown Majesta, the ultimate symbol of conservative Japanese success, but he doesn’t drive. He still takes the bicycle.

His biggest splurge, famously, was buying two Nintendo Wiis. One can assume he played them alone.

His diet consists almost exclusively of cup ramen and convenience store onigiri. He claims that eating a large meal makes him sleepy, which slows his reaction time. He avoids caffeine because it makes him jittery.

He famously said, “If you care about the money, you cannot make the right decisions.” He views money as a score in a video game.

Thinking about what money can buy invites emotion, and to Kotegawa, emotion is the enemy.

Part VII: The Lehman Crisis

The year 2008 was a test of fire for everyone. Kotegawa was not immune.

The Lehman Loss

In September 2008, Kotegawa made a rare misstep. He bet on the survival of Lehman Brothers. He bought the stock, assuming the US government would bail it out as they had done with Bear Stearns.

They did not. Lehman Brothers filed for bankruptcy.

Kotegawa lost approximately 700 million yen (roughly $7 million at the time).

In a rare display of emotion, he admitted to punching his computer monitors. He broke two of them. It is the only recorded instance of him losing his temper.

However, what defines him is not the loss, but the recovery.

In October 2008, right in the heart of the crisis, Kotegawa made a move that shocked the market.

He paid cash, approximately 9 billion yen, for a commercial building in Akihabara. The building was known as “Chomp Chomp Akihabara” at the time (it is now known as the AKIBA Cultures ZONE). The building was a 6-story hive of maid cafes and anime shops.

As the real estate market was collapsing, cash was king. Kotegawa, that had piles of cash finally used some to buy a distressed asset in Akihabara, the holy land of otaku culture.

It was the perfect hedge. As a fellow Otaku himself, he knew the building was undervalued. He knew he couldn’t day trade 20 billion yen forever, so he swapped volatility for rent. For ten years, he earned a massive yield that required zero mouse clicks.

By 2018, rumors suggest he sold it for 12 billion yen, capturing a 30% gain on top of the rent.

Part VIII: Where is He Now?

Since the sale of the Akihabara building, Kotegawa has largely vanished.

He appeared in the “shikiho” (Japan Company Handbook) substantial shareholder lists for a few years, popping up on the registries of companies like JVC Kenwood or Oricom. But recently, his name has become scarce.

There are rumors. Some say he fled to Singapore to escape taxes. Others claim he shifted to private equity. But that contradicts his deep attachment to his home turf.

The reality is likely simpler. As his friend and rival CIS once said: “He doesn’t trade for money. He trades because it is the only thing he knows how to do.”

He is almost certainly still in Tokyo, sitting in a different high-rise, likely worth well over 30 billion yen. He has probably switched to global macro or index futures, where his massive size doesn’t break the market.

He is a ghost. But every time the market crashes, every time there is a panic, every time the charts turn red and the world is screaming “Sell!”, I know he is there.

Appendix: The Kotegawa Archive

Profile

• Name: Takashi Kotegawa (小手川 隆)

• Handle: B.N.F (B-N-F)

• Born: March 5, 1978, Ichikawa, Chiba

• Education: Nihon University, Faculty of Law (Dropout)

• Key Asset: AKIBA Cultures ZONE (formerly Chomp Chomp Akihabara) - Sold approx 2018

Estimated Wealth Trajectory

• 2000: 1.6 Million JPY - Initial Capital from part-time jobs

• 2001: 61 Million JPY - The Bear Market Divergence Strategy begins

• 2002: 96 Million JPY - Compounding small gains

• 2003: 270 Million JPY - Market recovery begins

• 2004: 1.1 Billion JPY - First billion yen milestone

• 2005: 8.0 Billion JPY - The J-Com Shock Trade (+2.2B yen)

• 2006: 15.7 Billion JPY - Featured on TV (”Gaia no Yoake”)

• 2007: 18.5 Billion JPY - Continued growth despite volatility

• 2008: 21.8 Billion JPY - Lehman Loss (-700M), Real Estate Purchase (9B)

• 2018: ~30.0 Billion+ JPY - Sale of Akihabara building

• 2025: Unknown (Likely >30 Billion Yen)

Strategy Summary

• 25-Day Moving Average: Primary baseline for value

• Deviation Rate (Kairi): The buy signal; specific % drops trigger entry

• Volume: Confirmation of panic/capitulation

• RSI: Secondary confirmation of oversold conditions

• Sector Correlation: Buying the “Laggard” in a moving sector

Famous Trades

• J-Com (2005): The 2 billion yen windfall from the Mizuho error.

• Lehman Brothers (2008): Bought the dip just before bankruptcy. Lost ~700 million yen. Punched two monitors.

• Softbank (2005/2014): Repeatedly traded swings in Masayoshi Son’s volatile empire.

Sources

• Purple Trading. “Legends of Trading: Mysterious Trader from Japan - Takashi Kotegawa”.

• Japan Times. “Day traders fight for respect in Japan’s tough market” (Coverage of CIS and B.N.F).

• Pocket Option. “Takashi Kotegawa Review: The Legacy of a Trading Legend”.

• Binance Square. “Meet BNF — The Japanese Day Trading Legend”.

• Ultima Markets Academy. “Trading Strategy of BNF Takashi Kotegawa”.

• Wikipedia (FR). “B.N.F (Takashi Kotegawa)”.

• Reddit r/Japan & r/JapanFinance. Discussions on Takashi Kotegawa’s whereabouts and real estate holdings.

• YouTube. “Gaia no Yoake” (Dawn of Gaia) - TV Tokyo documentary featuring B.N.F (2006).

Is this a bubble?

With the Nikkei 225 closing at 53,847 and the TOPIX standing at 3,613, the ghosts of 1989 have returned to haunt Japan.

Recently, the Japanese stock market has gone hyperbolic around the hype around Prime Minister Sanae Takaichi’s “Sanaenomics,” the frenzy in semiconductor stocks, and the sheer thrill that ”Japan might be back!”

The temptation to declare the market too expensive and hoard cash is strong. After all, the psychological barrier of 50,000 has been breached, evoking memories of the asset bubble of 1989 where the Imperial Palace grounds were rumored to be worth more than California.

However, in this article, I argue that the “Bubble 2.0” narrative is fundamentally flawed. I think we are witnessing a rational re-rating driven by the end of deflation, structural corporate reform, and a geopolitical realignment that favors Japan. Unlike 1989, when investors paid 60 times earnings for 1% yields, today’s market offers a positive equity risk premium and balance sheets loaded with cash.

The Ghost of 1989

To understand where we are, we must first exorcise the ghost that haunts every conversation about Japanese equities: the 1989 bubble.

In 1989, the Nikkei 225 peaked at 38,915. At that moment, the market was trading at a Price-to-Earnings (P/E) ratio of over 60x. The earnings yield was less than 2%, while the risk-free rate (10-year JGB) was hovering around 6-7%. Investors were essentially paying for the privilege of losing money relative to bonds.

Fast forward to January 2026. The Nikkei is at 53,847. The index level is higher, yes, but the valuation multiple has collapsed. The forward P/E of the Nikkei is approximately 23.9x, and more importantly, the broader TOPIX index trades at a forward P/E of just 17.1x. We have seen a massive compression in multiples over the last 36 years, even as earnings per share (EPS) have compounded.

Key Comparison: The Tale of Two Peaks (1989 vs. 2026)

• Index Level (Nikkei 225):

  • 1989 Bubble Peak: ~38,915

  • Jan 2026: 53,847 (+38% higher)

• Valuation (Forward P/E):

  • 1989 Bubble Peak: ~60x - 70x

  • Jan 2026: 23.9x (Nikkei) / 17.1x (TOPIX) (Valuations have compressed by ~65%)

• Cost of Capital (10Y JGB Yield):

  • 1989 Bubble Peak: ~6.0%

  • Jan 2026: ~1.1% (Capital is significantly cheaper)

• Equity Risk Premium:

  • 1989 Bubble Peak: Negative (-4.4%)

  • Jan 2026: Positive (+4.7%) (The signal has inverted; you are paid to take risk)

The crucial insight here is the Equity Risk Premium (ERP). In 1989, the bond market offered a risk-free 6%, while stocks offered a volatile 1.6% earnings yield. It was irrational to hold stocks. Today, the 10-year JGB offers ~1.1%, while the TOPIX offers an earnings yield of roughly 5.85%. Investors are being paid a premium of nearly 475 basis points to take equity risk. This is a signal of deep, persistent skepticism that has yet to be fully priced out.

The CAPE Ratio Perspective

Robert Shiller’s Cyclically Adjusted Price-to-Earnings (CAPE) ratio provides another layer of comfort. In the late 1980s, Japan’s CAPE ratio reached astronomical levels, nearing 100x, the highest valuation of any equity market in history. Today, the CAPE for Japan sits in the low-to-mid 20s, significantly below the US market, which is now around a CAPE of 40x.

The “intrinsic value” of a market is ultimately the present value of its future cash flows. In 1989, the market was pricing in growth rates that were physically impossible to achieve. In 2026, the market is pricing in modest growth, despite a backdrop of massive fiscal stimulus and corporate reform.

Sanaenomics and the End of Deflation

The second pillar of my thesis is macroeconomic. The inauguration of Prime Minister Sanae Takaichi has introduced a regime change that I believe the market has only partially discounted.

Sanaenomics is frequently compared to Abenomics, but as someone analyzing the legislative text, I see distinct differences. Abenomics was about defeating deflation through monetary velocity. Sanaenomics is about crisis management investment and strategic self-sufficiency. It is a wartime economy mindset applied to peacetime industrial policy.

I might not be a fan of the frivolous spending of Sanae Takaichi, but there is no denying that it is good for the stock market.

The ¥21.3 trillion ($136 billion) stimulus package approved in late 2025 is not a scattershot cash handout. It is highly targeted:

• Strategic Growth Investment (¥7.2 trillion): This capital is directed squarely at the commanding heights of the modern economy: AI, Semiconductors, and Defense. By subsidizing the capital expenditures (Capex) of major industrial firms, the government is effectively lowering their cost of equity and increasing their Return on Invested Capital (ROIC).

• Household Support (¥11.7 trillion): Sanaenomics addresses consumption with direct energy subsidies and cash handouts (¥20,000 per child). This is critical because it puts a floor under consumption during the transition to an inflationary environment.

For the value investor, this fiscal policy acts as a put option on the economy. The government has signaled it will not allow nominal GDP growth to stall. The Bank of Japan’s upgrade of FY2026 GDP growth to 1.0% is a direct result of this spending.

The End of Deflationary Psychology

For thirty years, cash was king in Japan because goods became cheaper tomorrow. That era is dead. Inflation is now sticky above 2%. The wage negotiations (Shunto) have resulted in hikes of over 5%. This “wage-price spiral” is actually the salvation of the Japanese equity market.

Why? Because inflation destroys the value of the massive cash piles held by Japanese corporations.

• The Hoarding Penalty: In a deflationary world, holding cash is an investment, so Japanese companies might have been seen as too conservative for hoarding cash, but it was actually a good strategy. In a 2% inflation world, a company with 40% of its assets in cash (a common profile in the Standard Market) is destroying shareholder value by 2% annually in real terms.

• The Behavioral Shift: Inflation forces management to do something with the cash, invest it (Capex) or return it (dividends/buybacks). We are seeing this shift in real-time.

Corporate Governance: The Revolution is Real

If macroeconomics provides the fuel, corporate governance is the engine. The change in tone over the last 24 months is nothing short of revolutionary. The days of polite nods and inaction are over. The Tokyo Stock Exchange (TSE) and the Financial Services Agency (FSA) have fundamentally altered the incentives.

The “Name and Shame” Regime

In March 2023, the Tokyo Stock Exchange released directives on how companies should improve their valuations by providing Price-to-Book (P/B) improvement plans.

Foreign observers who don’t understand Japan dismissed the TSE’s Cost of Capital Directive as there was no legal ramifications.

What they don’t understand is that in Japan, the threat of being named and shamed is more powerful than any punishment...

The exchange proved this by publishing a list of compliant companies, effectively isolating those who hadn’t disclosed P/B improvement plans.

By late 2025, over 90% of Prime Market companies had fallen in line.

The Unwinding of Cross-Shareholdings (Mochiai)

Cross-shareholding has been the poison pill of Japanese capitalism, companies holding shares in their clients and banks to cement relationships and insulate management.

• The Catalyst: The FSA has pressured the mega-banks and insurers to liquidate these holdings to zero.

• The Value Unlock: When a company sells a cross-shareholding, it converts a low-return asset (a stagnant stock) into cash. It then faces pressure to return that cash to its own shareholders. This creates a “double compounding” effect: the seller becomes leaner and more capital efficient, and the cash is recycled into the market via buybacks.

In 2024, share buybacks hit a record ¥18 trillion. In 2025, the pace accelerated further and will likely continue accelerating throughout 2026.

Which Sectors are Worth Investing In?

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The US doesn’t have a monopoly on superstar investors with cult-like followings on X.

Japan has its own market wizards, and in this series, I profile the country’s three absolute best: www9945, Mikimaru, and Kabu1000.

In Part 1, I looked at the Janitor who amassed $5 million. Now, in Part 2, I reveal how Mikimaru (みきまる), a practicing physician, turned a combination of high dividends and tangible “shareholder gifts” into serious wealth. By compounding cash returns with a steady stream of goods, he built a multi-million-dollar fortune.

The Alchemist of Fukuoka

In the high-frequency, algorithmic coliseums of modern finance, where latency is measured in nanoseconds and value is often decoupled from tangible reality, the investment methodology of the individual known as “Mikimaru” appears to be a relic of a bygone era.

Get 25% off forever

To the uninitiated institutional eye, Mikimaru, a pseudonym for a practicing physician based in the Fukuoka Prefecture, might be dismissed as a “Yutai” (shareholder perk) hunter. The Yutai system is a unique Japanese tradition where companies remunerate shareholders not just with cash, but with physical goods like premium food, restaurant vouchers, or prepaid cards. Wall Street often sneers at this as an inefficient use of capital.

Yet, to dismiss Mikimaru as a mere coupon collector is a profound analytical error. A deep-dive analysis of his decades-long track record, his widely read blog (”Mikimaru’s Shareholder Perk Investment”), and his published works reveals a sophisticated, ruthless, and psychologically fortified capital allocator.

He has constructed a proprietary valuation framework called “Comprehensive Combat Strength” (Sogo Sentoryoku).

This report deconstructs how a provincial doctor turned a disastrous early trading career into a fortune by realizing a fundamental truth. The greatest risk to an investor is not market volatility, but their own emotional fragility.

Part I: Origins of the “Yutai King”

The origin story of Mikimaru is indistinguishable from the tragic archetype of the Japanese retail investor in the early 2000s. Entering the market around 2001, Mikimaru had just finished his medical degree, and as a young physician with a high disposable he dove head first into investing. The Japanese market of this era was a desolate landscape. The bubble of 1989 had long burst, but the “Lost Decade” was metastasizing into a permanent state of deflationary stagnation.

Early records and retrospective writings from his blog indicate a chaotic initial phase. Like many people trading part-time, he was very susceptible to hyped up stocks. He treated the Japanese market like a casino which resulted in significant capital destruction. He describes this era as one of “tuition payments” to the market…

The turning point arrived in the mid-2000s, coinciding with a broader renaissance of value investing literature in Japan. Mikimaru encountered the works of Benjamin Graham and the early letters of Warren Buffett. The intellectual pivot was sharp. He abandoned speculation for the rigid discipline of “Net-Net” investing: Buying companies trading below their Net Current Asset Value (NCAV).

Mathematically, this was sound. The Japanese market in the mid-2000s was littered with companies trading at 0.5x or 0.3x book value, effectively worth more dead than alive. However, Mikimaru soon encountered the “Value Trap” paradox. A stock cheap enough to be a Net-Net is often a terrible business with declining revenues and indifferent management. Holding such stocks is a test of immense patience.

He realized that “Deep Value” was intellectually satisfying but emotionally corrosive. Watching a portfolio of stagnant, obscure machinery manufacturers while the rest of the world (and growth stocks) moved forward created a sense of futility. He needed a mechanism to bridge the gap between buying value and realizing value.

The Discovery of “Anesthesia”

It was here that Mikimaru synthesized his defining insight: The psychological utility of the Shareholder Perk. He observed a curious phenomenon in his portfolio. When he held stocks that sent him tangible goods, a box of seasonal vegetables, a voucher for a steak dinner, his tolerance for price volatility increased dramatically.

True to his medical background, he dubbed this the ‘Anesthesia’ of investing.

In traditional finance, a ¥5,000 dividend and ¥5,000 worth of rice are economically equivalent (ignoring taxes). To Mikimaru, they were distinct. The cash dividend is invisible; it disappears into a brokerage account, indistinguishable from capital. The rice is physical. It arrives at the door. It is consumed by the family. It creates a positive feedback loop unrelated to the stock ticker.

More importantly, the perk creates a “Yield Floor.” If a stock trading at ¥1,000 pays a ¥30 dividend and gives ¥20 in perks (5% total yield), and the price falls to ¥500, the yield on cost for a new buyer becomes 10%. This creates a natural support level where retail investors, attracted by the massive yield, step in to buy, preventing the freefall often seen in non-Yutai growth stocks.

By 2008, as the Global Financial Crisis decimated portfolios worldwide, Mikimaru had fully pivoted. He was no longer just a value investor; he was a “Yutai Value” investor. He aggressively deployed capital into the crash, targeting companies with strong balance sheets and generous perk programs.

While others panicked, he focused on the arrival of his shareholder gifts.

Part II: The Mikimaru Framework

Mikimaru’s methodology is codified in his “Comprehensive Combat Strength” (Sogo Sentoryoku) system. The terminology, borrowed from Dragon Ball’s power levels, presents a playful exterior that masks a rigorous, multi-factor valuation model

The central thesis is that a stock’s attractiveness cannot be reduced to a single metric like PER (Price-to-Earnings) or PBR (Price-to-Book). Instead, it is the sum of its valuation, its growth potential, and crucially its Total Yield.

The formula for Total Yield in the Mikimaruverse is explicit:

This inclusion of the “Monetary Equivalent of Perks” is the secret sauce. Institutional analysts value perks at zero. Mikimaru values them at market replacement cost.

If a company gives a voucher for a ¥4,000 meal, that is ¥4,000 of post-tax disposable income saved. For a high-earning doctor in a top tax bracket, earning ¥4,000 net might require earning ¥8,000 gross. Therefore, the “Invisible Dividend” of the perk is mathematically far more valuable than the cash dividend.

The Ranking Hierarchy

To manage the cognitive load of tracking hundreds of positions, Mikimaru assigns a “Combat Rank” to every stock. This ranking determines portfolio allocation.

🏆 Rank SS: The Holy Grail

Valuation: PER < 10x | PBR < 0.6x Yield: Total Yield > 5.0% Quality: Strong balance sheet (Net Cash). Identifiable catalyst for growth or re-rating.

ACTION: Maximum Aggression. Top 5–10 holding. Buy until it hurts.

💎 Rank S: Elite Class

Valuation: PER < 12x | PBR < 0.8x Yield: Total Yield > 4.5% Quality: Stable moat. Durable competitive advantage. “Sleep well” stock.

ACTION: Heavy Allocation. Core portfolio pillar.

✅ Rank A: Standard / Good

Valuation: Fair Valuation Yield: Total Yield > 4.0% Quality: Solid business. Attractive perks that are personally useful.

ACTION: Standard Unit. (e.g., 100–500 shares). Hold for perks.

👁️ Rank B: Watchlist

Valuation: Average Yield: Average Quality: No significant catalyst.

ACTION: Monitor. Hold minimum unit or sell.

⛔ Rank C: Avoid

Valuation: Overvalued Yield: Low Yield Quality: Dilutive management. Declining moat.

ACTION: Liquidate.

The “Jungle” Strategy

To navigate the Japanese market, Mikimaru employs a “Jungle” strategy, holding hundreds of names (400–600). This extreme diversification is a structural necessity dictated by the regressive nature of Yutai yields.

Unlike standard dividends, which are linear (owning 10x shares pays 10x dividends), Yutai perks effectively punish concentration. A minimum unit of 100 shares might yield a ¥2,000 gift card (a 2% yield) but increasing that position to 1,000 shares often yields only a marginal increase, perhaps to ¥3,000 (a 0.3% yield). This math forces the investor to “farm” the minimum unit across a vast number of companies rather than concentrating capital.

Within this broad “Jungle” portfolio, equities are assigned one of two distinct roles:

• The Gladiator: Deep-value “shield bearers” (often PBR around 0.3x) like construction firms or regional banks. They provide the defensive line through asset value and steady dividend floors.

• The Alice: Growth stocks disguised as value. These are potential “ten-baggers” entering new markets or expanding margins.

The ultimate goal is to identify Gladiators mutating into Alices: cheap, safe stocks that suddenly find a growth engine. When a stock offers the downside protection of a Gladiator with the explosive upside of an Alice, it achieves the coveted “SS” rank.

Part III: Mikimaru’s Portfolio

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The US doesn’t have a monopoly on superstar investors with cult-like followings on X (formerly Twitter).

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