In the U.S., retail investors poured into Reddit’s WallstreetBets to get hot stock tips. In Japan, they have opened a bar where investors can thrash out stock punts.
The brainchild of Satoshi Uehara, the pseudonym used by a popular investing influencer on Twitter, Stock Pickers was set up in early March after a crowd-funding campaign which took in more than $50,000—nearly six times its goal.
The bar has been almost full nearly every day since it was opened, said Riki Yamauchi, a finance professional and the bar’s PR manager, even though Stock Pickers was launched when Japan was still in a coronavirus state of emergency. (Bars remained open during the state of emergency but were asked to close early.)
Yamauchi said many younger investors come to meet Uehara, who has attracted a following on Twitter for his advice on how to get started in investing and understand stock valuations. More seasoned traders also come to offer their investing savvy to newbie traders, said Yamauchi of the bar. Stock Pickers is the first-such watering hole in a city whose unusual bars include those staffed with everything from ninjas and robots to penguins.
“People’s mentality is changing—you really have to think about how to structure your wealth,” said Yamauchi, adding that young people have become more receptive toward investing after three decades of zero growth in the country.
Like the rest of the world, stuck-home and bored small investors, drawn to easier-to-navigate online-trading platforms, have become a bigger part of the stock market during the Covid-19 pandemic.
A surge in Japan’s stocks back near three-decade highs, driven higher by improving earnings, comparatively high shareholder returns and a country relatively unscathed by the pandemic, is also bringing back amateur investors. Many of them were scarred by the collapse of Japan’s stock market after the bursting of the 1980s asset bubble.
Stock Pickers’ walls are decorated with books on value investing and how to bet like legendary investor Warren Buffett. Investing paraphernalia and inside jokes are also all over the bar. Nestled in one part of the bar is a cannon intended to symbolize the “bazooka” of central bank asset buying at Haruhiko Kuroda’s Bank of Japan that has startled investors on more than one occasion. “Don’t fight the NIPPON GINKO (the Bank of Japan),” a sign urges.
Investors can try a “Margin Call”—one of the many original investing-themed drinks. Made with vodka, grenadine and Campari, the cocktail has a biting taste intended to evoke the bitter feeling traders might experience upon getting that unpleasant call from their broker.
Or sample a “Lehman Shock,” a heavy-hitting drink named after the local shorthand for the global financial crisis. Among the non-alcoholic options, there’s an “Abenomics”— perhaps named because it’s less punchy than investors might have hoped — made with cherry blossom syrup and grapefruit juice.
Retail’s Back
Japan’s government has spent decades trying to encourage greater retail participation in the country’s stock market. Until the pandemic, despite decades of near-zero returns on bank accounts, Japan’s retail investors had stayed away. Now they make up around 21% of the stock market, up from just 16% before the outbreak. (In the U.S., the individual investor boom during the period has led retail traders to double to around 20% of stock market volumes.)
Rakuten Securities, the country’s second-largest online brokerage, saw its accounts surge 25% to 5 million in the last nine months of 2020, with growth most notable in those under 30. Japanese online trading accounts are now growing by double-digit levels for the first time in 13 years, Takayuki Hara, an analyst at SMBC Nikko Securities Inc., wrote in a report, while the customer base is getting younger. “The base of retail investors is broadening,” he wrote.
Japan’s retail investors still play it safe, buying blue-chip shares like SoftBank Group Corp. and Nintendo Co. rather than piling into the American day-trader favorites in the past year like video-game retailer GameStop or bankrupt Hertz Global Holdings Inc. —though some are not adverse to a fling on local meme stocks.
Since it opened its doors, Stock Pickers has also become a surprise favorite among the pros: institutional investors.
“It’s because of Reddit and GameStop” that more institutions are interested, says Yamauchi. “People really care about what retail is thinking.”
