Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Qualcom Stock Market Harbinger - 12th Aug 22
Apple Exec Gets World's 1st iPhone 14 for Daughters 14th Birthday Surprise Present Unboxing! - 12th Aug 22
Steps to remember while playing live roulette online - 12th Aug 22
China Bank Run Protests - Another Potential Tiananmen Square Massacre? - 11th Aug 22
Silver Coin Premiums – Another Collapse? - 11th Aug 22
Gold-to-Silver Ratio Heading Lower – Setup Like 1989-03 - 11th Aug 22
Severe Stocks Bear Market: Will You Be Among the Prepared 1.5%? - 11th Aug 22
There's a Hole in My Bucket Dear Liza, UK Summer Heatwave Plants Watering Problem Song - 11th Aug 22
Why PEAK INFLATION is a RED HERRING! Prepare for a Decade Long Cost of Living Crisis - 9th Aug 22
FREETRADE Want to LEND My Shares to Short Sellers! - 8th Aug 22
Stock Market Unclosed Gap - 8th Aug 22
The End Game for Silver Shenanigans... - 8th Aug 22er
WARNING Corsair MP600 NVME2 M2 SSD Are Prone to Failure Can Prevent Systems From Booting - 8th Aug 22
Elliott Waves: Your "Rhyme & Reason" to Mainstream Stock Market Opinions - 6th Aug 22
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! - 6th Aug 22
WHY PEAK INFLATION RED HERRING - 5th Aug 22
Recession Is Good for Gold, but a Crisis Would Be Even Better - 5th Aug 22
Stock Market Rallying On Slowly Thinning Air - 5th Aug 22
SILVER’S BAD BREAK - 5th Aug 22
Stock Market Trend Pattren 2022 Forecast Current State - 4th Aug 22
Should We Be Prepared For An Aggressive U.S. Fed In The Future? - 4th Aug 22
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? - 4th Aug 22
Stock Market Another Upswing Attempt - 4th Aug 22
What is our Real Economic and Financial Prognosis? - 4th Aug 22
The REAL Stocks Bear Market of 2022 - 3rd Aug 22
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ - 3rd Aug 22
Don’t Be Misled by Gold’s Recent Upswing - 3rd Aug 22
Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse" - 31st July 22
Gold Stocks’ Rally Autumn 2022 - 31st July 22
US Fed Is Battling Excess Global Capital – Which Is Creating Inflation - 31st July 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Is Japan's Stock Market the Most Attractive in the World?

Stock-Markets / Stock Markets 2013 Oct 21, 2013 - 04:49 PM GMT

By: Investment_U

Stock-Markets

Alexander Green writes: A few months ago, I opined that Japanese stocks are among the most compelling investments worldwide.

Sure enough, since its June low the market there is up 18%. Yet I feel even stronger about Japanese equities now than I did then. Here’s why…


In 1989, the Nikkei 225 – Japan’s equivalent of the S&P 500 – hit a new all-time high near 40,000. Today, more than 20 years later, it languishes near 14,000, roughly 65% lower.

In other words, the Japanese market would have to almost triple just to get back where it was in 1989.

It wouldn’t surprise me if it did just that by the end of the decade. After all, it’s happened before. In the 1970s, the U.S. market returned just 0.34% a year for a 3.4% total return for the decade. The Japanese market compounded at 16%, generating a 10-year return of 344%.

Improving Politics

Last year, after more than 50 years as outsiders, Japan’s opposition party trounced the Liberal Democratic Party in a landslide. The new government is shrinking the country’s massive bureaucracy and cutting wasteful public spending. It is also cutting taxes and focusing on small and mid-sized businesses.

Of course, we’re all skeptical of politicians’ promises, but there is real change afoot there. New laws are generating labor market flexibility and greater participation in free-trade agreements. The Bank of Japan is in the midst of a massive monetary easing program. Japan reported 3.8% annualized growth in the April-June period. And, according to the Tokyo Stock Exchange, foreign investors poured a net $8.18 billion into Japanese stocks in September.

When the Japanese market began a strong run last November, there were indications that it was the hot money – short-term traders – pouring in. But a decisive parliamentary election in July is giving long-term investors confidence that Prime Minister Shinzo Abe will stay in power long enough to carry out difficult structural changes to the economy.

Long-Term Money

So long-term growth fund managers – as well as hedge hogs – are piling in. One reason is the weaker yen, down 12% against the dollar this year. This acts like rocket fuel for exports. Why? Because a weak currency makes products cheaper in foreign markets, giving Japanese manufacturers an edge over the competition.

How do you play this development? There are dozens of worthwhile Japanese ADRs trading on Nasdaq and the Big Board. In our short-term trading services, we have made good money this year trading companies like Nidec Corp. (NYSE: NJ), Sony Corp. (NYSE: SNE) and Nissan Motor Co. (Nasdaq: NSANY).

And Toyota Motor Corp. (NYSE: TM), a recommendation in our Oxford Trading Portfolio, is up more than 60 points since we got in last year.

If you prefer to hunt with a shotgun rather than a rifle, you can capture the performance of Japanese large-cap stocks with the iShares MSCI Japan Index (NYE: EWJ) and the best of the small-cap sector with the Wisdom Tree Japan SmallCap Dividend Fund (NYSE: DFJ). Better still, spread your bets and own both.

The important thing is to recognize that the Japanese market is on the road to recovery and in a pronounced uptrend. Are you taking advantage of it?

Good investing,

Alex

Source: http://www.investmentu.com/2013/October/japan-stock-market-most-attractive.html

http://www.investmentu.com

Copyright © 1999 - 2013 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in