Investor Toshiya Imura turned 1 million yen into 8.5 billion yen in profit over 12 years! The secrets of stock selection and fundamental analysis | Learn from the Experts "Money Flow" | Money Creation Monex Securities investment information and media useful for money.

Toshiya Imura started investing in Japanese stocks with an initial capital of 1 million yen, and by the end of 2023, his total profit reached 8.5 billion yen (including unrealized gains, pre-tax). Having transitioned from a former comedian to an investor, he aims to “contribute to Japan’s household finances” and has expressed his desire to establish a fund in the future. We asked Mr. Imura about the reasons that led him to start investing, his perspective on the market, key points for stock selection, and the secrets of fundamental analysis.

●Profile of Toshiyoshi Imura●

Stock investor (Yen millionaire), small and medium-sized enterprise consultant. Former comedian. Born in 1984. Started stock investment while in university, officially launched in 2011 with an initial capital of 1 million yen. Achieved a total operating profit of 100 million yen in 2017, and surpassed 8 billion yen in 2023. Established Kaihou Inc. with the mission of “contributing to Japanese households.”

Starting Investment to Gain “Something to Stand On” in the Harsh World of Comedy

――Could you tell us what prompted Mr. Imura to start investing in stocks?

I started investing in stocks in 2005, when I was in my third year of university. It was at a time when I was thinking about my future that I found something I wanted to do, but it was not the usual path of getting a job; it was the path of becoming a comedian.

I became interested in comedy after entering university and starting to live alone. Since my father was strict and I wasn’t allowed to watch comedy shows at home, I thought, “Is there really such an amusing world out there? It’s amazing to get paid just for talking!”

That said, I was prepared for the fact that it wouldn’t be an easy path, so I turned my attention to investing in Japanese stocks as a means to acquire the “necessary funds.”

When I was a student, I came across content on the internet that said, “Comedians have unstable incomes and may suddenly get work, making it difficult to take part-time jobs. Therefore, some people make a living through stock trading.” At the bottom of that page, there was a banner that said, “Open a securities account here.” I have been interested in money since I was a child, saving my New Year’s money diligently and even though I didn’t play games, I would resell them for profit… So I vaguely thought that I would eventually get into investing. Therefore, when I saw that banner, I clicked on it without any hesitation.

I dove into the world of comedy with the resolve to endure about ten years of hardship, but I started investing with the hope that “if I can make money through investing, I might be able to drink regular water instead of muddy water.”

Experienced losses of several million yen in day trading

――Was the investment successful from the beginning?

That is not the case. There are as many ways to profit from investment as there are people, and I believe that the depth of this variety is one of the attractions of investing. However, it is impossible to make a profit if your suitability and method do not fit together. Moreover, it is often not clear which method suits you until you try it. I have also tried various methods, eliminated those that did not suit me, and ultimately arrived at my current method.

――What methods did you incorporate when you first started investing?

I started investing seriously in 2011, and the trigger was meeting my wife and thinking that I wanted to marry her. I quit my part-time job, which was helping with living expenses, and started investing with an initial amount of 1 million yen.

At that time, in addition to the methods that focused on fundamentals, I was also doing day trading, but day trading was really tough. I felt like it was a soul-sucking task every day. However, I could hardly stop. I think I was finally able to stop around 2017 when my assets exceeded 100 million yen.

In 2016, when my first child was born, I think it was about a week later that my wife said to me, “Don’t hold the baby with that kind of face.” That day, I had lost about 2 million or 3 million yen in day trading, and it must have shown on my face. Those words hit me hard, and I decided, “I should quit day trading…” But the next day, I ended up thinking, “Maybe I can recover yesterday’s losses.” It took me a few months to completely stop.

That doesn’t mean day trading is bad. It’s just that it didn’t suit me.

What to look for are brands like “discounted natto”

――Starting with an initial capital of 1 million yen, you have achieved a total profit of 8.5 billion yen over 12 years. Mr. Imura, please tell us about your investment methods.

This is a method of investing in stocks with “alpha (α)” by focusing on the fundamentals of the company. Alpha refers to excess returns. One point to note is the realization that “even a good company does not necessarily see its stock price rise,” which is a contradiction.

Each individual stock has a fair price (fair value) and intrinsic value, and the difference between the current market price and the intrinsic value is the source of profit. The basic principle of fundamental-focused investing is to gain capital gains as undervalued stocks return to their fair price. No matter how good a company is, if its valuation exceeds intrinsic value in the market, I believe that the stock price will experience downward pressure and eventually converge to its rightful position.

Assets with alpha can be likened to “discounted natto.” Natto is a nutrient-rich food, but as its expiration date approaches, it may be sold at about half the original price. However, natto close to its expiration date can still be delicious to eat, and since the natto bacteria are proliferating, it can be considered that its intrinsic value is actually increasing. Although the intrinsic value remains unchanged or even rises, the valuation has dropped to half, so it can be said to be a remarkably favorable situation.

However, if the discounted item is strawberries, it means that the intrinsic value itself is diminished because the item itself has deteriorated. What I am looking for are brands like “discounted natto” that have an intrinsic value that remains unchanged or even increases, yet are being discounted. My investment strategy is to quickly identify these in the market.

The list of 500 brands, also known as “secret sauce”, is constantly refreshed.

――What is necessary to identify tokens with alpha?

To identify alpha, there are three main steps: 1) the process of discovering potential stocks with alpha, 2) the process of digging deeper into the discovered stocks and scrutinizing their alpha, and 3) the process of anticipating when the alpha will be resolved. The key point is that it is not enough to simply find stocks that are undervalued compared to their intrinsic value; it is also necessary to consider catalysts that could lead to the resolution of alpha.

Until then, I will incorporate into my investment ideas a story where what was thought to be a clearance item is recognized by the market as a “selected item.” The investment ideas will be developed from both a top-down approach, which starts from changes in the external environment, and a bottom-up approach, which involves analyzing financial statements and conducting company interviews to identify stocks.

In the process of deep diving into the stock, we calculate its intrinsic value by constructing financial models, and as an investment idea, we invest in stocks that are expected to double the profit within 2 to 3 years as the alpha is resolved.

――What kind of information should be checked when discovering new tokens?

The most important thing is the disclosure information of companies. I check all timely disclosure information such as earnings announcements and financial explanation materials of the 3,900 companies listed on the Tokyo Stock Exchange. I do not open and read everything, but I check all headlines of disclosure information, performance, and performance revisions, and from the materials of the stocks that show changes, I look for the causes and results and take extensive notes. Recently, I have been focusing on corporate governance reports and carefully observing descriptions related to management that consider capital costs and stock prices.

――What points should I look for in the financial statements?

The key points to consider vary by asset, so there is no definitive answer, but a common perspective is to focus on changes. We will add assets that show signs of change to our asset list.

The list includes about 500 stocks that have been judged to contain a certain degree of alpha, and we refresh it daily by replacing stocks while observing earnings reports and price movements. The list is like a “secret sauce” that we continue to use while adding to it multiple times.

We see the settlement as an opportunity to refine this list. If we detect signs of changes that may resolve the alpha, we raise the monitoring level and begin investigations.

Reasons Why I Think “The Market is Frequently Wrong”

――How much time do you spend on company analysis?

I spend most of the 24 hours in a day, excluding sleep time, on refining my investment skills. This includes reading disclosure materials such as financial statements, conducting company interviews, researching industries, creating models, and browsing investment media such as analyst reports, Twitter, and investment blogs… there is a vast amount to do. Recently, I have also been challenging myself to improve efficiency; for example, when a corporate governance report is disclosed, I have set up a system to extract only the descriptions related to the cost of capital and notify via email. If I can improve efficiency, I can research more about stocks.

Sometimes I am told, “Isn’t that going a bit too far?” There is an intention behind this to strengthen my mentality by pushing myself to the limits.

I believe that “the market is frequently wrong.” I wonder if “the market is not aware of the intrinsic value and is mispricing it.” In order to have that conviction solidified to buy against the declining stock prices, I am conducting research that can be described as a form of suffering.

It is only through what can be called苦行 that one can approach investment with a strong mindset.

When buying, with the mindset of “I have researched this far, so even if the market says ‘NO’, I will buy everything myself,” I will go against the market. This shows a strong will that I have a different answer than the other participants.

So, after I start buying, I don’t cut my losses even if the stock price drops by 10-20%. But I do become extremely anxious. The more I worry, “Maybe there’s something wrong with my hypothesis,” the more I transform that anxiety into motivation to research. I will go to all lengths to investigate until my anxiety is dispelled.

In the process, there may be things that I have overlooked or insights I’ve gained, which may lead me to the decision to sell. However, when I am confident that there is not even a slight doubt in my judgment, I approach buying with the mindset of “buying everything.”

Only hold stocks that you can be 95% confident in, keeping them to a manageable amount in one hand.

――It means that you will only buy stocks that you are confident can take alpha.

That’s right. There is a saying from Mr. Wakahide Takeda, a businessman and investor, that is important in making trading decisions.

“If you want to buy that much, I’ll sell it to you. If you want to sell that much, I’ll buy it from you. Buy and be happy, sell and be happy.”

I have never met Mr. Takeda, but I believe this saying hits the truth. Similarly, I also cherish the investment proverb “There is a path behind where people go, and a mountain of flowers.”

――How many tokens do you hold?

Usually, I think that people search for materials they want to buy and invest in. I do the opposite and try to find materials I don’t want to buy. As a result, I often end up avoiding investments due to two or three red flags. However, sometimes something comes up that makes me think, “There are no materials I shouldn’t buy.” In such cases, I feel like I have no choice but to buy, and I continue to investigate, refining my conviction that within 2 to 3 years, I can achieve double or more profits. Depending on my level of conviction, the position size varies, and I imagine that more than 95% of the stocks will be the main ones. In a year, I invest in about 10 stocks or so. The number of stocks I hold is also around 5, which fits in one hand.

Effective Use of New NISA: The Accumulation Investment Limit for Long-term, Accumulated, and Diversified Investment, and the Growth Investment Limit for Stable Dividend Stocks

――Changing the subject, a new NISA has started from 2024. What kind of utilization methods are you considering, Mr. Imura?

In the past, I opened a Junior NISA account for my daughter and applied for IPO book building and held stocks with shareholder benefits. Now, I don’t want to be distracted by NISA, so I’m not using it. Although NISA has become significantly easier to use with its permanent extension and increased limits, I believe it is also necessary to understand its drawbacks.

The disadvantage of NISA is that it cannot offset profits gained in a taxable account against losses incurred. If funds are managed in a taxable account and a loss occurs, the tax can be refunded by offsetting it against profits. However, in a NISA account, it is meaningless unless profits are earned, and if a loss occurs, tax refunds due to loss offsetting are not possible, resulting in a net loss. In short, NISA is “a battle that must not be lost at all.”

Even so, there are significant benefits to utilizing NISA. For example, if you are planning to invest in a long-term manner, it would be better to take advantage of the installment investment framework by steadily accumulating investment trusts and practicing long-term, installment, and diversified investments. If you are utilizing the growth investment framework, even if you cannot predict future stock price movements, dividends will be tax-free, so it might be a good idea to invest in stocks that provide stable dividends. It is wise to conduct a company analysis within your means, not just focusing on dividends, but also considering companies with a healthy financial condition, such as having net cash and consistently positive free cash flow each year.

――Thank you for your time today.

Photo: Toshiharu Takei

*This interview was conducted on January 5, 2024.

*This content is based on personal experience and does not represent the opinions of our company.

Please make the final investment decision based on your own judgment and responsibility.