Seven (More) Samurai to Take On the Magnificent Seven

They call them the Seven Samurai.

Analysts from Goldman Sachs Group Inc. caused a stir in Tokyo this week with a well-timed report highlighting a group of stocks that could serve as Japan’s equivalent of the Magnificent Seven that have come to dominate US equities.

Using a screening process to select top-performing stocks, Goldman settled on the following: Toyota Motor Corp., Subaru Corp. and Mitsubishi Corp., along with four semiconductor plays in Screen Holdings Co., Advantest Corp., Disco Corp. and Tokyo Electron Ltd.

I’m not convinced. (Subaru? Really?) The Magnificent Seven are more than a stock basket: Coined by Bank of America Corp. analyst Michael Hartnett, the phrase took off not just because the stocks are doing well, but because they symbolize the US market, from the global dominance of Apple Inc. to the irrational exuberance around Tesla Inc. The seven don’t include some massive companies that don’t fit this framework, such as Berkshire Hathaway Inc.

The irony, of course, is that the movie The Magnificent Seven is a remake of Akira Kurosawa’s classic Seven Samurai. The US film might be better known, but the Japanese title has undoubtedly better stood the test of time. The same is often true of Japanese firms, which can fail to generate buzz but nonetheless become a better long-term investment. (Warren Buffett might agree.)

What then might a true Seven Samurai look like? Instead of a screening process, I’ve drawn up a list of companies that say something about modern Japan and the state of Japanese enterprise; enterprises that have stood the test of time or aged better than their US counterparts. (Note: In case you can’t already tell, this is most definitely not investing advice.)