< The 2014 All-Japan Research Team
Hayato Nagayoshi jumped from Bank of America Merrill Lynch to Mizuho Securities Group in September 2012 and slipped from the 2013 ranking. The researcher is back on the roster this year — and in impressive fashion, capturing the No. 2 spot, his best showing to date. He wins praise from one money manager for the “100 percent accuracy” of his analyses. Another investor cites his “original quantitative approach.” Nagayoshi examines value controlled by quality, he says, since value by itself, such as a stock with a low price-to-book ratio, is exposed to timing risks. “Value factors are getting more and more highly correlated with beta,” he explains, “like six years ago.” A strategy that is exposed to both attributes is more stable than a method based on either in isolation, adds Nagayoshi, because predicting whether value will work or whether quality will work is “equivalent to forecasting the macro condition and market sentiment.” However, he does advise that “value now has a big opportunity to gain factor returns after a long period of polarization of valuation.” The value spread — that is, the difference between the book-to-market ratios of value and growth stocks — is the widest it has been in 13 years, when dot-com shares collapsed, he notes. “The larger the spread, the greater the expected return for low price-to-book-ratio stocks,” Nagayoshi concludes. |