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This Is The Cheapest Asset In The World

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Cheap if you are buying in yen.

The yen is ridiculously strong against the pound just now so is japan cheap if buying in pounds?

I take your point.

You can buy hedged funds but hedging is hard to get right.

I still foresee a time where Japanese stocks are rising 20% per annum and the yen devalues against the pound at say 10% per annum.

For japanese smaller companies these can easily rise at 40% per annum.

From a technical point of view the Nikkei is absolutely beautiful. It has collapsed over a 20 year period with cyclical short term uptrends that has weakened out so many investors over the years.

I also love the classic double bottom and the fake rally between 2004-07. I think it has now hit rock bottom and the next secular long term bull market may be about to brew.

Edited by ringledman
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in the above discussion there has been no mention of japan's fiscal policy, or general political economy

Or demographics. Or culture which doesn't emphasise profits above all else and so most companies will keep useless workers on board to promote social unity but that hits profits. The 20 year bear run has just as much as to do with very low return on equity for Japanese corps.

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Which isn't favorable in the long term!

As emperical evidence shows that there is zero correlation (actually a slightly negative correlation) between economic growth and stock market returns, the economy of a nation is irrelelvant to stock market returns.

The big driver for returns is starting valuation. Japan's starting valuation is the best around. One of the few places with a decent margin of safety.

On the demographics front, as the population falls GDP per person in Japan will rise. With 1.5b Chinese next door, japanese exporters are currently booming with Asian trade.

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