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
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22
UK House Prices Real Terms Sustainable Trend - 17th June 22
Why I’m buying the “new” value stocks… - 17th June 22
Optimize Benefits from R&D in Software Product Development with an R&D Tax Credit Software - 17th June 22
Want To Save On Your Business Energy? Here Are Some Helpful Tips - 17th June 22
State of the Stocks Bear Market - 15th June 22
The Gold Market Is Getting Ready for Another Interest Rate Hike - 15th June 22
The Dow Industrials’ Big 8-Wave Cycle is Incomplete - 15th June 22
7 Things You Need to Know About Finances - 15th June 22
Dow Stocks Bear Market Forecast Trend Trajectory - 13th June 22
Why Putin has KILLED Russia - 12th June 22
Trading the Calm Before the Stock Market Storm – Consider Putting On A Long Strangle - 12th June 22
Shrinkflation! - 12th June 22
6 Useful Tips To Help You Create A Good Marketing Strategy - 12th June 22
Big Inflation Will Spur Gold Price - 11th June 22
Economic "Hurricane": Here's a Take on a Bank CEO's Warning - 11th June 22
Axie Infinity (AXS)Mmade a lot of People Rich… Temporarily, What We Learned - 11th June 22
The CRACK UP BOOM! Implications for Stocks, Housing. and Commodities, Silver Potential - 10th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Japanese Stocks Are Up 400 Points in Three Days... More to Come?

Stock-Markets / Japanese Stock Market Nov 20, 2012 - 10:54 AM GMT

By: DailyWealth

Stock-Markets

Dr. Steve Sjuggerud writes: Are you ready to pay money... just to keep your money in the bank?

That's what the incoming leader of Japan wants...

The head of Japan's LDP party – Shinzo Abe – says he wants Japan's central bank to print money in "unlimited" sums. And he favors "zero-to-negative interest rates" in Japan.



Negative interest rates force money out of savings – and force some of it into stocks and real estate. Long story short, Japan's blue-chip stocks could soar...

Japanese stocks are already up 400 points in just the last three days, bringing Japan's benchmark stock index (the Nikkei) to 9,150. But that's nothing...

The index was over 10,000 earlier this year. That's a long way from its all-time highs of near 40,000 at the end of 1989.

In short, you haven't missed a thing... yet.

Elections in Japan are on December 16, and polls say Abe's party will win. So this zero-to-negative interest rate policy looks like it will be the country's plan.

So how can we play it?

Longtime DailyWealth readers should be familiar with what I call the "Bernanke Asset Bubble." It's the idea that stocks and real estate in the U.S. should soar to unimaginable heights, as the Federal Reserve has pushed interest rates to zero and is printing money.

Now, the Bernanke Asset Bubble has "gone global." And it appears Japan will be the next country drinking Fed Chairman Ben Bernanke's Kool-Aid.

Buying Japanese stocks is the best way to take advantage of the situation...

First off, Japanese stocks are ridiculously cheap. Secondly, the possibility of a weaker currency will help Japanese stocks – particularly exporters (from automakers to electronics makers). A weaker yen makes Japanese exporters more competitive internationally.

To show how cheap Japanese stocks are, consider the WisdomTree Japan SmallCap Dividend Index (DFJ). It holds hundreds of Japanese stocks, most of which have a market value of less than $2 billion.

This index is trading at an incredibly cheap 0.65 times book value. Book value, as you may know, is a rough measure of "liquidation" value – assuming you sold all the company's assets and gave the money to stockholders. It is crazy that the stocks in this index would have to rise 50% just to get to "liquidation" value.

For comparison... the U.S. stock market trades at over two times book value. So Japanese small-cap stocks would have to rise three-fold just to be in line with U.S. stocks.

The story is the same when you look at another measure – price-to-sales. These Japanese stocks trade at 0.33 times sales. They would have to soar four-fold based on this measure to be in line with U.S. stocks.

In short... Abe wants to impose the Bernanke Asset Bubble on Japan.

The best way to play it is through a basket of Japanese stocks – like DFJ. Check it out...

Good investing,

Steve

Further Reading:

The Bernanke Asset Bubble has gone global... and is breaking into emerging markets. According to Steve, these markets are cheap and hated. Now, the uptrend is emerging. And based on history, investors could see 25%-plus returns in just over a year. Learn more here: The Bernanke Asset Bubble Has Finally Gone Global.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2011 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth 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