Which is correct, the Nikkei Average PER Index base or the weighted average?

Everyone”Nikkei Average PER”If you watch,Index basedorweighted averageor which one are you watching?
And which one do you think is correct?

The Nikkei average PER was introduced as 22.70 times in Mosate this morning, and “is it that expensive?” “What kind of calculation?” I found a post on X saying, “It's not that expensive, is it?”

After refusing to say that this is my theory from here on out,Which is correct, exponential base or weighted average?Let's take a look at these discussions in order.

firstThe Nikkei average PER of 22.70 times is an “index based” storyIt is.

However, as of yesterday, it was 21.76 times higher, so when was the data used? That's right. The figure around 22.7 times is the figure in mid-May, and it has dropped about 1 times since then.

Well, aside from the minor differences,In Mosate they talk on an “exponential basis”That's it. On the other hand, I explained in videos etc. that the Nikkei average PER is 16.58 times, but this”weighted averageIt's a story about”.

So, hereWhich is correct, “exponential base” or “weighted average”?It's going to be a story called.

Conclusion: Either is fine, but if you place importance on investment results, the weighted average and the rate of change are important now
If it were me, I would answer.

(Forecast) There are many people who imagine that the Nikkei Average is undervalued or overpriced with PER. Me too.

So speaking of why I use a “weighted average,”Because media such as the Nikkei Shimbun and Radio NIKKEI have been using “weighted averaging” in an old fashion, that's all.

A lot of people have been watching PER on weighted averages for many years, soAt the moment, there are still many investors who have that imageThat's all.

but herePeople who think “which one is correct as a theory”I have one. That's fine, but it's wrong to go too far and think of it as a weighted average! Wasting time is the worst. it's a completely meaningless act.

If you consider the calculation logic of an index called the Nikkei Average, it is more correct to think on an exponential basis rather than a weighted averageI think so too. This is because PER for stocks with high contributions, such as FASTRI and Tokyo Elec, should be reflected more, but they are pulled by PER for stocks with high market capitalization.

In other wordsIf it's a weighted average, it's calculated lowerIt's going to happen.

Therefore, from the meaning of an index called the Nikkei Average, it is more appropriate to use an index base. That's why there are quite a few people who are obsessed with this.

The problemIt's not “which one is right,” but “which one can produce better investment results”Right?
There are so many people who misunderstand this.

We're not doing academics, we're not doing math.I'm investingThat's it.

Even if it is inferior as a theory, if many market participants have adopted it and there is a possibility that the market price will move because of it, the inferior theory will improve investment results.

It's a simple story.

Which is the correct PER for the Nikkei average? If we were to talk about that, we should probably discuss it on an exponential basis. However, just because we talk on an index basis, it is impossible to argue whether the current PER of the Nikkei Average is high or low. This is because the question is whether it is expensive or cheap compared to when.

Talking about the rate of change is important, and then it's okay to look at the rate of change with a weighted average adopted by many people.
It's a different story if you scrutinize the rate of change based on the index and the rate of change of the weighted average and discuss the differences.

In other words, it is important to make fixed-point observations on an exponential basis or a weighted average, so there is not much difference whether you use either one unless you verify the differences between the two. That rate of change matters.

There are actually a lot of stories like this in the investment world.
・Which is correct to use, the 20-day moving average or the 25-day moving average?
　⇒ Japanese stocks can be used on the 25th, and in the US on the 20th, because many investors are taking such actions
　⇒ Since there are many 20-day hires in FX, it might be better to look at dollars and yen on the 20th

etc.,Investment results will be better if you keep up with market participants' trends before considering whether it is correct or not。

Theoretical stock prices are completely uselessThis is exactly the story.
Now 1000 yen PER 11.3 times PBR 0.85 times, theoretical stock price 2,500 yen
It's always going to be evaluated and bought up to 15 times PER and 1 times PBR, so even the theoretical stock price is ridiculous!

As a result, it didn't go up much even after 3 or 5 years, and even at the highest price, it's only been 5 years since I was wandering around for around 960 yen and getting a dividend of about 1%... haven't you experienced this?

It's just a story about calculating theoretical stock prices from fundamentals, and investors didn't buy that much even though the calculation logic was correct. “No, it's a value stock at a low price... Assets don't increase when you say, “It's just that it hasn't been evaluated in the market yet.”

Not “cheap,” just “cheap”That's why.

Rather than being correct as a numerical value, correct as calculation logic... it is more important for market participants to think that it is correct. However, speaking of this, stocks that are rising without being properly evaluated are in a bubble, and stock prices will always drop! It is refuted, but that's absolutely true (laughs)

So,If you look at the chart and it comes down, you can just sell it “at that time”It is.Even if it is correct in theory, it is much nonsense to hold stocks that don't rise and detain fundsIt is.

I've been talking about it quite a bit, but in fact, there is a possibility that people with personalities who are “too particular about what is right” are unknowingly heading in the direction of not producing results.

Fundamental screening is essential when investing. butBeyond that, decipher supply and demand and technology clearlyOtherwise, you will invest based on theoretical stock price expectations.

Even when looking at the same thing, people's evaluations change 180 degrees over time and time, don't they? Also, people tend to be swept away by the actions and opinions of many people.

Bonus: the “mushroom mountain” vs. “bamboo shoot village” controversy that has continued for many years。

I love mushroom mountains! Iyatake no Kodaro! Without looking at it from the viewpoint of, which one is essentially selling now? If you're in your teens or 20s, which do you prefer? It's a story where investors have to look at it from that point of view...

well... he's a boring guy (laughs)

I used to choose bamboo shoots, but recently I prefer mushrooms! Your sense of taste changed with age!! lol
I tweeted like this a little while ago but I'm no good as an investor lol lol