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Japanese stocks are well placed to confound the skeptics

“Japanese equities have been shunned for some time. The country was picked as the least preferred region among attendees at our global conferences last month ... But there are a few reasons to think this view is overly pessimistic.”

Financial Times 2/12/2020


  • edited February 2020
    HJPNX and HJPSX are solid picks in this area. Also a cheaper exp ratio from the T Rowe Price fund - PRJPX. All 3 funds are rated 5 stars at M*. I own HJPSX.
  • Maybe they are finally well placed. Otherwise they've been confounding optimists for years.

    I have long read that Japan is one of the worst countries for share-holder rights. I don't know if that is still the case. Even if that were to change, I'm not sure I see the argument for a specific investment in Japan, greater than whatever is already held by my various fund managers.

    Going WABAC, some of us may remember the outlandish claims made for the value of Japanese real estate. Here is a back of the envelope exercise by a professor at Northwestern to calculate the value of the land under the emperor's palace at that time:
    $852,500,000,000, a gigantic price tag for a single property. Even more astonishing, if we take the Ginza office space a reference point, the price balloons to over $5.1 trillion. For comparison, Japan’s GDP in 1989 was about 5.3 trillion dollars.
    And their stock bubble was over twice as high as our tech bubble.

    For more gory details check this story from the NY Times, March 28, 1992.
  • BOJ is a major shareholder - almost 40% in Japanese listed companies. Our central bank should do the same, just buy SPY.
  • edited February 2020
    I ran across this item from the BBC, which made me wonder what the writer of the FT article is smoking:
    Japan's economy shrank at the fastest rate in five years at the end of 2019 as it was hit by a sales tax rise, a major typhoon and weak global demand.

    Annualised gross domestic product (GDP) fell by a much steeper than expected 6.3% in October-December.

    There are also concerns the coronavirus outbreak will mean the slump continues this quarter.

    That has raised fears that the world's third-biggest economy may fall into recession.

    During the period Japanese consumer spending fell 2.9% after the country's sales tax was raised in October to 10% from 8%. In the same month Typhoon Hagibis hit large parts of the country.

    Last quarter, capital spending dropped by 3.7% and exports slipped 0.1% amid the ongoing US-China trade war.
    Looks to me like that knife hasn't stopped falling yet.

    Hard to believe these two stories were penned withing a week of each other.

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