Discovering “ten-baggers” of more than 80 stocks… A salaryman “billionaire” reveals investment techniques he learned from his failures.
Start investing as soon as you get a job…and you will be a “billionaire” in 7 years!
The “Trump trade,” which anticipates the economic policies of U.S. President-elect Trump, is accelerating, and major U.S. stock indexes such as the New York Dow are moving to new all-time highs. On the other hand, the Japanese stock market has been sluggish due to weaker-than-expected corporate earnings results. Under these circumstances, what stocks should be targeted?
We asked Mr. Aitaka, a billionaire who has discovered more than 80 “10X stocks” while working as a company employee and is known as a “ten-bagger hunter.
Profile: Mr. Ashitaka
He started investing in stocks in 2008 when he started working and became a “billionaire” in 2003. His stock assets now exceed 300 million yen, thanks to his ultra-diversified investment of over 800 stocks, which he rarely sells once he buys a stock. He is also the author of “Salaryman Investor Earns 250 Million Yen by Multiplying Stocks by 10” (Diamond Inc.).
For 12 consecutive years… “Ten-bagger” is a stock whose share price has increased tenfold.
Ten-bagger” is a word related to stock investment. A “ten-bagger” is a stock whose share price has increased tenfold, which is quite difficult to achieve even for veteran investors. However, Mr. Aitaka, an active salaried investor, started investing in stocks in 2008 and has achieved ten-bagger performance for 12 consecutive years since 2001, reaching a total of 81 stocks. What kind of investment technique does he use?
I think the term “ten-bagger” conjures up images of stocks with rapidly growing profits, but my basic stance is to aim for income gains in the form of dividends and shareholder special benefits. I believe that I have been able to find many “ten-baggers” as a result of my income-gain-oriented approach.
Income gains” refers to interest earned on savings accounts and bond investments, as well as dividends from stocks. In contrast, “capital gain” refers to the profit gained from an increase in stock prices in stock investments.
Failure in concentrated investment… Abandonment of “capital gains
When I first started investing in stocks, I was aiming to make an explosive profit from capital gains, which are gains from an increase in the price of a stock. However, as a salaried employee just starting out in the workforce, I had limited funds, so I concentrated my investments in specific stocks in an effort to increase them efficiently.
One of my investments was in a ticketing company called Lawson Entermedia (stock code: 2416; delisted), but when the misconduct of a board member was discovered, the stock price plummeted, almost halving its value, and I lost a lot of money. After this failure, I stopped concentrating on investments and capital gains,” he said.
After that, Mr. Aitaka changed his investment stance to aiming for income gains, “aiming to build a ‘personal pension’ with unearned income,” he says.
Became a “ten-bagger hunter” by investing for long-term income
Income gains can only be received if one continues to hold stocks.
Strictly speaking, you should hold stocks on the last trading day of the month when you are entitled to receive dividends and shareholder benefits, but if you buy right before the last trading day, you are likely to catch the stock at a high price.
However, it is difficult to buy and sell flexibly during the daytime when you have to work. Therefore, Mr. Aitaka decided to simply hold on to a stock once he bought it.
He said, “Even if you buy and sell at the right time, it doesn’t always work out. If it doesn’t work out, it is stressful, and it is not suitable for me because I have a day job. I am not a professional trader, so I can’t buy and sell frequently, and once I buy a stock, I hold it for a long time without selling it.
After that, he used his salary, minus living expenses, to buy 100 shares of the stocks that caught his attention, and held on to them.
I am an average salary earner with at most 100,000 yen in my pocket every month,” he said. For a while after I started, I couldn’t afford to buy bulk stocks such as Fast Retailing and Nintendo, where the investment amount per unit is more than 1 million yen.
However, there are many attractive stocks at affordable prices, and the result of my purchases over the past 10 years is 800 stocks, 80% of which I bought only 100 shares. Most shareholder benefits are given to shareholders with 100 shares of stock, and in many cases, the benefits are the same even if you hold 200 shares. I stick to holding 100 shares per unit because it is the most efficient way to obtain shareholder benefits.
He achieved his first ten-bagger in 2011 and became a billionaire in 2003. He became a billionaire in 2003, and now has over 300 million yen in stock assets.
These accomplishments can be attributed to his stock selection and gachi ho, but it is not an easy task. Since Mr. Aitaka started investing in stocks, the Nikkei Stock Average hit its lowest level since the burst of the bubble economy in 2009, and there was a crash in 2011 due to the Great East Japan Earthquake. He has experienced a number of crashes up to the present, but the fact that he has remained unwavering in his gachiho (hard-hitting) attitude even in such times can be said to be a major reason why he has become a multimillionaire.
How does Mr. Aitaka use his strengths as a salaried worker to discover “promising themes,” and how does he find stocks that are performing well from among the stocks he has discovered? What are the three stocks he is currently focusing on? For more details, please refer to the paid version of “FRIDAY Subscription.
Interview and text： Kenji Matsuoka
After working as a money writer, financial planner, and market analyst for a securities company, Mr. Matsuoka became independent in 1996. He writes articles on finance and asset management mainly for business and economic magazines. Author of "A Textbook for the First Year of Robo-Advisor Investing" and "Understanding with Rich Illustrations! A book that will definitely benefit you with cashless payment.
