Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

The Stocks Bull Market Almost Everyone is Missing

Stock-Markets / Japanese Stock Market Jan 13, 2013 - 02:23 PM GMT

By: Investment_U

Stock-Markets

Alexander Green writes: A powerful new bull market in stocks is just beginning to take off. Yet virtually no one you know – including seasoned investors – is taking advantage of it.

No, I’m not talking about the U.S. market, which is in the midst of its own three-and-a-half-year upswing. I’m talking about Japan. The Nikkei 225 – Japan’s equivalent of our S&P 500 – has surged 12% over the last eight weeks. In my view, this is just the beginning of a powerful move higher. Yet almost no one is on board. And it’s not hard to see why…


In 1989, the Nikkei 225 – Japan’s equivalent of the S&P 500 – hit an all-time high near 40,000. Today, 24 years later, it languishes near 10,500, almost 75% lower. In other words, the Nikkei 225 would have to nearly quadruple just to get back where it was in 1989.

What happened to drive Japan’s market down so far for so long? Let’s start with a late-80s real estate bubble that made our own recent housing mania look bush league. Property prices were so inflated that at one point the grounds of the Tokyo Imperial Palace were valued higher than all the real estate in the state of California. Now that’s crazy…

You can guess what happened to the banks that loaned money using real estate like this as collateral. Japan suffered the mother of all banking crises. And the resulting 20-year deflation led to that country’s two “lost decades,” virtually no economic growth and sharply contracting stock prices.

To top it off, Tokyo may be even more politically dysfunctional than Washington. Government spending has been even more profligate. Public debt as a percentage of GDP is the developed world’s highest at more than 200%. And powerful vested interests have blocked reform.

But voters have finally said “enough is enough” and change appears to finally be on the way with the election of Japan’s new Prime Minister Shinzo Abe, who served a previous term in 2006 to 2007.

Abe has pledged to spark growth out of the world’s third-largest economy. He has created a cabinet post and a special headquarters team devoted to juicing things up with everything from tax reform to health care deregulation. He also plans to root out a mass of old rules and customs that stifle business.

We’re all skeptical of politicians’ promises, of course, but the recent surge in the Tokyo market reflects the consensus that this time the change is real. Yet Japanese stocks remain among the least expensive and most unloved in the world. If the Nikkei 225 doubled tomorrow, it would still be cheaper than the S&P 500 on a price-to-book basis. Virtually no one is enthusiastic about the Tokyo market.

Yet history shows that when it enters a bull run, it can look a bit like the Silver Spurs Rodeo. For example, if you invested $10,000 in the S&P 500 in 1970 and reinvested dividends, two decades later it would have been worth over $76,000. Not bad. But the same amount invested in the Nikkei 225 would have turned into more than $600,000.

In recent years, the cost of doing business in Japan has decreased dramatically. Land prices, office rents and labor costs have come way down. So have taxes and tariffs. And there have been serious banking reforms.

The nation also sits on a mountain of personal financial assets – more than $100,000 for every man, woman and child. After more than two decades of negative stock market returns, most of this capital is sitting in low-yielding bank deposits. Even a small fraction of these assets returning to the equity market could give it a serious jolt.

Global equity managers are also seriously underweight Japan. Many of them have managed to beat their benchmarks by ignoring this market. Yet if the upsurge in Tokyo continues, they will be forced to play catch-up and rapidly pour billions into this market. This could well be the catalyst for the next leg up.

How do you play a resurgent Japanese stock market? There are dozens of Japanese ADRs traded in the U.S., plenty of (mostly unknown) Japanese mutual funds and more than a few ETFs. Many of them represent exceptional value.

And when a smart investor sees exceptional value, he jumps.

Good Investing,

Alex

Source : http://www.investmentu.com/2013/January/japans-bull-market-everyone-is-missing.html

by Alexander Green , Oxford Club Investment Director Chairman, Investment

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

6 Critical Money Making Rules