(Bloomberg) --

These are tough times to be a retail investor -- let alone one in the public sphere.

Last Tuesday market watchers in Japan spotted that a prolific day-trader, with assets large enough that he appears in mandatory shareholder filings, had cut his stakes in several companies he had previously touted on his must-follow Twitter feed. The choice to do so wasn’t easy, says Toru Yamada, a noted investor in Japan’s equivalent of FinTwit.

“I’ve sold a lot of my shares and securities in the last month - at a rough estimate I lost about 8 billion yen ($75 million),” Yamada told Bloomberg News, revealing that he manages about 45 billion yen in total. “I dumped about 20% of my assets down the drain.”

Yamada, who goes by the account name @Tonpin1234 on Twitter and is best known as Tonpin, can be a divisive figure among Japanese day-traders. His cheerful daily greetings when the market opens and closes -- often accompanied by pictures of bulls and bears -- and his jolly cartoon profile picture featuring a character from one of Japan’s longest-running anime -- bely a pugnacious attitude.

As the coronavirus spread, Japan’s benchmark Topix index lost almost 30% of value from the start of February to mid-March. Since then, Japanese stocks have rebounded, with the Topix recording its best week since at least 1990.

“I don’t know if we’ve hit the bottom, but I learned during the last financial crisis that I need to get rid of them when there’s still liquidity,” Yamada said last Tuesday, as shares started to recover.

The 27-year investment veteran worked for years at funds overseas that focused on Japan shares, before returning to the country in 2013 to go it alone and focus on smaller stocks. “With smaller companies, I can take a decent stake and make proposals for how to improve corporate value,” he said. “I’m not what you would call an activist, but I want the companies to do well in the long run.”

Yamada’s picks are followed by day traders, colloquially called “locusts,” who swarm onto bets by high-profile investors. His Twitter profile typically lists his current bets, which in the past have included larger cap stocks such as Square Enix Holdings Co., though it’s usually with small caps where he makes his presence felt. Translation and security software maker Terilogy Co., for example, more than doubled in the three months after he first disclosed his stake in August 2018.

The Mysterious Twitter User Attracting a Swarm of Japan Traders

But last Tuesday was a day of reckoning for some of the “locusts.” Yamada slashed his stake in Terilogy from 13% to just 2.7%, and trimmed stakes in petroleum-product maker Fuji Kosan Co. and plastic product and automobile parts maker Tensho Electric Industries Co. He also removed all his positions from his Twitter profile.

“Tonpin’s sold out of Terilogy,” said one disappointed follower. “When it went over 1,000 yen in 2018, I was moved. That guy is amazing. Respect.”

Guilty Pleasure

Terilogy will be hit by the drop in number of foreign visitors to Japan and the postponement of the Tokyo 2020 Olympics, Yamada says. Oil instability pushed him to let go of stake in Fuji Kosan Co., though he says he wants to invest in it again when the situation allows due to the company’s shareholder-focused management.

“I like to invest in companies that are actually doing amazing things, but don’t have great marketing and so are unable to boost their value,” he said. “I don’t have a title. I’m just a retail investor.”

But not everyone is a fan. Critics have accused him of using his influence to pump up stocks before dumping his holdings. One doesn’t have to spend long on his Twitter feed before becoming a bystander to an argument.

“A manipulator like you needs to watch out too,” said one typical post earlier this month, posting pictures of some of Yamada’s holdings at the time amid the market crash. Within a few minutes Yamada had replied: “Something wrong, old man?”

The thread devolved into the type of back-and-forth tennis of insults that can make Yamada’s feed such a guilty pleasure -- though it ended with him politely exchanging “good night” messages with one of his critics. Asked about those who accuse him of manipulation, Yamada is sanguine.

“When many Japanese people lose, they want to blame it on somebody else,” he says. “Perhaps because I lived abroad for a long time, I know their approach to investing is 180 degrees different.”

To see more on Japan holdings disclosures, click here

Yamada’s locust followers may have to wait to ride on his next bet. He sees the Nikkei staying around its current 19,000 level for the moment, but expects it to dip in April.

“Everybody will be releasing bad earnings, cutting dividends, there will be lots of negative news,” he says. “You could say it’s priced in, and it is, but when you see those numbers even if you don’t sell, it’s hard to buy.”

But if you’re feeling brave or betting for the long-term, he says railways and airlines look attractive, and will be buys once the number of new virus cases peak or if a viable vaccine is developed.

“When that happens, I think the JR companies and airlines will rebound regardless of the state of economy at that time,” he said.

(Updates with Yamada’s total asset amount in third paragraph)

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