Former bureaucrat investor, changed jobs to master investment, to US growth stocks

This is NUK (handle name).

Mr. NUK, an individual investor who has a career from a bureaucrat to a management consultant. In addition to fundamental analysis, he invests in individual US stocks selected by examining business models from the perspective of a management consultant, which is his main business. Almost all of the holdings are growth stocks.

Actually, the reason why NUK turned to consulting was because he was addicted to analyzing this investee. When I was a civil servant, I had no knowledge of financial accounting, few opportunities to be exposed to the latest trends in the world, and on top of that, I worked hard. I started to be interested in investing because I wanted at least a window to see the outside world. But when you start looking into investing, it becomes interesting. After obtaining a bookkeeping qualification, he devoted himself to investment theory, finance theory, management strategy, innovation and study, and finally changed jobs to master management.

Unsatisfied with standard U.S. stocks, moving to growth stocks

NUK first chose to invest in high-dividend defensive stocks such as Johnson & Johnson (JNJ). I built a portfolio by selecting undervalued stocks with reference to PER. About five years ago, when NUK started investing, investment in high dividend stocks and defensive stocks was popular among US stock bloggers. I felt it." On the other hand, I didn't feel like I could hold Japanese stocks for a long time, and I didn't touch companies with too high P/E ratios like Amazon.com because I felt it was dangerous.

It was an investment that started with all the preparations, but it's a world that doesn't go according to theory. When I started using it, I didn't get the performance I expected. There were some stocks that went up, but if you average it out, it's about 10% a year. I don't think it makes sense to invest in individual stocks. On the other hand, GAFAM, which felt that it was dangerous, raised its stock price regardless of the high PER. Mr. NUK changed his mind, saying, "You should attack growth stocks to increase your assets."

Confirming performance growth and competitive advantage

NUK's major investment policy is long-term investment in stocks that can be expected to grow in performance and rise in stock price over the long term. If you come across a growth stock that interests you, first check the growth in performance. And dig deep into the business model.

In addition to sales and profit growth rates and gross profit margins, we also check the use of expenses. Even if there is a deficit, if it is due to expenditure necessary for growth, it will be viewed positively. For the business model, consider whether you can maintain your competitive advantage over the next 5 to 10 years, and how far the market scale will expand in the future. Ideally, the company should be in a market that is expected to expand in scale and that is doing business with high profit margins that would be difficult for rivals to enter.

Snowflake (SNOW) for example. It is a company that undertakes everything from data collection to utilization on a cloud basis. "Once users start using it, they can't go anywhere else, and it brings in more and more new customers. It's a business model that excels in both offense and defense. The stock price is a little high, but business performance is catching up," he said. In addition, the business models of Malabai Lifesciences Holdings (MRVI), which is expected to play an active role in the production of COVID-19 vaccines, and Outset Medical (OM), which is expected to have continuous demand for dialysis, are also highly evaluated.

However, he reveals that investment methods, including the method of discovering growth stocks, are in the process of trial and error. In the future, he would like to actively post his thoughts on investment, including his failures, on his blog.

(Kenji Homma)

[Reconstruction of the article in the December 2021 issue of Nikkei Money]

Nikkei Money December 2021 issue Japanese and US stocks rising from here Author: Nikkei Money Publishing: Nikkei BP (2021/10/21) Price: 750 yen (tax included) Buy this book (help): Amazon.co .jp Rakuten Books