Big difference in the same stock price appreciation

新潟県長岡市 アパレル衣類修整のプロ集団 山田修整有限会社
Big difference in the same stock price appreciation

I am Yoshida, president of Yamada Shusei Ltd., a professional apparel garment repair group in Nagaoka City, Niigata Prefecture.


Even in the same stock price spike, there is a big difference in the background and factors between the stock price spike during the bubble period and the current spike.


The stock price surge during the bubble period was the result of accelerated economic growth in Japan in the late 1980s, which stimulated domestic industry and consumption, leading to an increase in corporate earnings and stock prices.


On the other hand, the current surge in stock prices is the result of Japanese companies being seen as relatively stable amid the global economic downturn caused by the new coronavirus, and foreign investors switching their investments from China to Japan, pushing up stock prices.


Therefore, it can be said that the soaring stock prices during the bubble period reflected the strength and competitiveness of the Japanese economy, whereas the current surge in stock prices is due to the flow of foreign funds and relative valuations. Some call this a "cold bubble".


Under these economic conditions, the following are some of the key points that Japanese small and medium business owners should be aware of.


1) Clarify your company's strengths and weaknesses

Foreign investors' interest in Japanese stocks is mainly limited to large-cap stocks and well-known companies. Small and medium-sized companies need to clarify their strengths and weaknesses by analyzing what value their businesses and technologies provide, what needs and markets they serve, and what competitors and threats they face.


2) Planning for business and skills succession

 Many small and medium-sized enterprises  suffer from aging managers and a lack of successors. In order to sustain their businesses, it is important not only to find successors to manage them, but also to pass on their skills and technologies to the next generation.It is advisable to start preparations as early as possible by utilizing plans and support systems related to business and skills succession.


3) Review energy and environmental measures

 The effects of global warming and climate change cannot be ignored by small and medium-sized enterprises .Improving energy efficiency and introducing clean energy will help reduce costs and environmental impact. In addition, environmentally friendly products and services can meet the needs of consumers and business partners.Energy review and environmental measures can increase the competitiveness and sustainability of small and medium-sized enterprises.


In any case, the current surge in stock prices is hardly a reflection of Japan's economic prowess and competitiveness, so it will be important to carefully monitor the situation and be prepared on the ground.