State of Origin - Tokyo vs. Osaka - Osaka clearly wins....

With Australia’s State of Origin Rugby Match this evening, we thought it would be fun to compare historical price performance of Tokyo-based companies  vs. Osaka-based companies and then all the other city outside of Tokyo. Now we looked back over the last 15 years and Osaka-based companies have clearly done better. Osaka-based companies are up 84% compared to Tokyo-based companies that are only up 14% over the last 15 years. Other-based companies also did well and are up 60% since 2001.

Now our first thought was that there was a small-cap bias. However when we limit all the universes to between 100 and 400 ¥bn mkt-cap, Osaka still does better. Tokyo-based companies are down 2% over the 15 years. Osaka-based companies are up 58% and other-based companies are up 40%. We then thought that maybe the Fundamentals are better in companies outside of Tokyo. This is not the fact. We compared aggregate Sales growth for Tokyo-based companies and Osaka-based companies and there is not a significant difference. The same holds true for aggregate OP Margins.

Right now we do not have a good explanation of why on average Osaka-based companies have done better. However, if you are looking at similar companies with one in Osaka and one it Tokyo, it might be worth looking hard the Osaka one. 

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