Investing in Japan

T

thomsk

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I've been reading for a year or more that japan is worth considering in terms of REITS and shares. I have not bothered doing this yet - as there has been no significant news reports to suggest it is about to "take-off".
However, property seems to be doing ok there, and the japanese stocks seem to be erring on the positive side recently.
Maybe now, or in next few months is a good time to invest. Anyone any ideas ...positive/negative ?? or can anyone recommend investment relating to japan.
 
Nikkei 225 is off about 20% since June...so I'm not sure what you mean by erring on the positive side lately?
 
thomsk said:
Maybe now, or in next few months is a good time to invest. Anyone any ideas
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You are looking for advice on how to predict the future and time the markets, right? If so then this is a pointless exercise in my opinion.
 
good point-sorry. I meant that the stocks have not been positive, but the yen is stronger(erring on the positive).
It's more REITS I have been reading about.
 
I invested in Japan at the beginning of the year expecting the Nikkei to rebound........it hasn't (gone down in fact). Definitely Japan isn't en vogue at the moment but I'm going to hang in there as I think there are a lot of positives. Despite the deflation Japan has been growing for the longest period since WWII, reforms of labour laws and foreign company ownership have been enacted and it is well placed to benefit from the China effect.The biggest downer for me is that Japan seems to be extremely exposed to the fortunes of the US and also its ageing population. However, the nikkei is less than half it's peak so you would expect there to be room for improvement.......
 
If Japan would open up to foreign workers it would be a major plus. When I lived there, it was only allowing in english teachers, nurses and 'entertainers'...
 
Here's a link to a summary of a recent Barron's article that was positive on Japan. The original article is out there but I couldn't find it. Like Calico I have been long and wrong on Japan this year. In addition to the negatives he/she lists Japanese companies tend not to be shareholder friendly. They keep a lot of cash , dividends are low, foreign and hostile takeovers are frowned on etc. This is changing but very slowly. I still think there's value there and it's certainly out of favour. Maybe next year!
http://www.seekingalpha.com/article/54608-japan-on-the-verge-of-a-rally-barron-s
 
***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP*


Japan has been a huge disappointment this year and failed to launch. But the future looks rosy for 2008 and a bounce could be strongly on the cards because

(i) Its banks do not appear to be caught up in the whole subprime mess

(ii) Tokyo office space an indicator of the economy is tightening at 2% and yields for class A office space in the central 5 wards has increased by 26% Ytd - commercial appreciation will follow

(iii) Prices are rising and deflation is at an end according to the Mac Fac.

(iv) Unemployment is now 3.6% and job offers ratio is increasing and wages are slowly on the move.

(v) Japanese S/market P/E is at an all time low of 15 which is unheard of anywhere else in the Far East

(vi)Although US exports have slowed, trade with BRIC has pushed total exports values above previous levels

(vii) The Yen to Stg is up 6% YTD and further appreciation is expected.

(viii) Most importantly the Topix rather than the narrow Nikkei has moved dividend yield higher than Japanese government bonds. On every occasion previously that this happened the market bounced 30% to 40%. Last time in 2005, 2002 and 1998. Expect same of the large grey funds storing billions of $ to switch from bonds to equity.

Based on dividend yield and P/E according to Goldman Sachs in the terms of world rating etc, Japan is the cheapest it's been for 33 years. Expect a big bounce in this market, failure to launch in the past is understanding but in the last 3 years the Nikkei has performed extremely well.

pm for advise
 
I am tempted. I went in last year thinking the Yen would rise. I was correct about that at the time but not being sophisticated enough of an investor to understand how to bet on currencies,I didnt make the right kind of bet, that is the market sunk when the yen rose and I had chosen a quinn life tracker.
The quinn tracker seems a straightforward and easy way of betting on the market but the currency situation seems to skew an equity investment. Whats the best approach to take when investing in japan ?
 
stir crazy said:
Whats the best approach to take when investing in japan ?
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Well, the Nikkei at it's peak was over 39000. It now sits at about 15500 so I believe a low charging index tracker is the best way.However, I like you took out a policy with Quinn back in february and have got hammered. Hopefully, if there is a year-end rally losses will be pared and next year will be the boom year.
 
MichaelDes said:
***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP STRONGLY***TIP*


Japan has been a huge disappointment this year and failed to launch. But the future looks rosy for 2008 and a bounce could be strongly on the cards because

(i) Its banks do not appear to be caught up in the whole subprime mess

(ii) Tokyo office space an indicator of the economy is tightening at 2% and yields for class A office space in the central 5 wards has increased by 26% Ytd - commercial appreciation will follow

(iii) Prices are rising and deflation is at an end according to the Mac Fac.

(iv) Unemployment is now 3.6% and job offers ratio is increasing and wages are slowly on the move.

(v) Japanese S/market P/E is at an all time low of 15 which is unheard of anywhere else in the Far East

(vi)Although US exports have slowed, trade with BRIC has pushed total exports values above previous levels

(vii) The Yen to Stg is up 6% YTD and further appreciation is expected.

(viii) Most importantly the Topix rather than the narrow Nikkei has moved dividend yield higher than Japanese government bonds. On every occasion previously that this happened the market bounced 30% to 40%. Last time in 2005, 2002 and 1998. Expect same of the large grey funds storing billions of $ to switch from bonds to equity.

Based on dividend yield and P/E according to Goldman Sachs in the terms of world rating etc, Japan is the cheapest it's been for 33 years. Expect a big bounce in this market, failure to launch in the past is understanding but in the last 3 years the Nikkei has performed extremely well.

pm for advise
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Hi MichaelDes - just out of curiosity...are you qualified to give investment advice?

If so, may I ask in what capacity?

I do not mean these questions to be offensive - am just curious.
 
MMilken said:
Hi MichaelDes - just out of curiosity...are you qualified to give investment advice? If so, may I ask in what capacity?
I do not mean these questions to be offensive - am just curious.
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No I am not a qualified seller nor do I profit from advise. My job is the complete opposite in fact but I manage quite a large portfolio on my own including OPI's. I have been to the Far East on a number of occasions and have a lot of insight. I favour the small companies route or those companies undervalued compared to any growth potential. You are right to ask MMilken as there are many hawks plying their wares in a round about manner.

Japan is a country however with an economic critical mass that most European countries would dream of having. It has stable growth brought about through sound manufacturing and intellectual services rather than through a short term consumerist bubble.
 
There was something that I am thinking may have been preventing much cash going into Japan in recent years, and that is the fact that many investors have been ploughing their money into china, latin america and bric/emerging.
It seems that many are now "cashing in" on china - and so may be waiting for another country to shift to,if you like. Japan does seem to have that potential, in the way that china was some years back??
Just a thought.....:)
 
One thing I am interested in and haven't been able to work out thus far is what implication, if any, does the stregthening of the yen have to japanese share prices? And also, what happens when the yen-carry trade starts to unwind?
 
Calico said:
One thing I am interested in and haven't been able to work out thus far is what implication, if any, does the stregthening of the yen have to japanese share prices? And also, what happens when the yen-carry trade starts to unwind?
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Thats what stung me in the last 12 months when I invested in Japan. Whats the point of investing in fantastic companies if the yen rises in value and cancels it out ? If we invest in equities how do we know that the yen currency risk wont cancel out our best efforts ?
 
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