Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

A Stealthy Stock Market You Shouldn't Ignore

Stock-Markets / Japanese Stock Market May 11, 2008 - 01:01 AM GMT

By: Yiannis_G_Mostrous

Stock-Markets Best Financial Markets Analysis ArticleAhead of the vote for Russian prime minister, Vladimir Putin set forth plans for a robust macroeconomic financial policy, reigniting the stock market to 2,280--a 3 percent gain--crossing the 2,200 mark for the first time since January as investor confidence swelled. Putin's primary goal: Reduce the tax burden on the oil sector to stimulate production and crude oil refining and lower inflation to single digits within the next few years.


Russia's fundamentally stronger economic potential and substantial financial reserves provide a robust foundation, which will help the country pass through this period of instability in the world economy. Russia can reap benefits from a number of opportunities, which are opening up now. This includes expansion of national capital abroad and domestic opportunities for boosting returns on investments of state financial reserves.

Putin was approved as prime minister by 392 out of 450 deputies who favored his candidacy.

I've been investing in Russia for quite some time now, and I still favor it as a valuable emerging market. I predicted in the beginning of the year that it would outperform well into 2008 and beyond. This recent spike is the beginning of a longer-term rally, and I expect profits to keep rolling in.

I've mentioned countless times that the Russian energy sector is undervalued. But with a new plan whose key priorities are developing the country's financial sector and cutting the oil tax burden, energy stocks will be revalued. The sector will benefit from Russia's tax-system changes and its outline for increasing its refining and gas business. (See my premium service The Silk Road Investor , 16 April 2008, A Bridge Across the Straits , for more.)

Earlier this week, Chip Hanlon--host of Market Neutral --invited me to give a podcast interview on the value of the Russian markets for Green Faucet . Visit www.greenfaucet.com/audio , and scroll down to Market Neutral: Russia to listen to my commentary.

The Rising Sun

The Japanese market is comfortably higher in the wake of The Economist's negative cover story on Japan two months ago. It looks as though the longer-term picture for the Japanese economy and stock market is much more positive than most investors perceive.

I previously noted the following regarding the British weekly's “Japain” analysis:

Although no one can be certain of the outcome, the British weekly is a contrarian indicator on many topics, and Japan is one of them.

When The Economist has mentioned Japan in the past, the market was ready to turn around, either to the upside or the downside, but always on the opposite direction of which the article had indicated. The usual time frame for the turnaround is between one and 18 weeks. Hopefully, the success of The Economist's forecasts will continue.

I've made the case for Japan's long-term potential on numerous occasions. The main idea is that the current economic cycle in Japan will be stronger and more enduring than most market observers anticipate. This view is based on the structural changes taking place in the Japanese economy (including changes in government financial institutions) and the eventual end of deflation.

On the latter point, the latest Consumer Price Index (CPI) numbers have turned slightly positive after a long time. This becomes even more important because they exclude food and energy.

Short-term market volatility aside, for long-term bulls on the nation's economy, Japan's confidence and its exit from deflation is all that matters. The normalization of rates increases the alternatives available for the Japanese so they can use their substantial bank deposits in more productive and profitable ways. Investors who don't think Japan's deflation years are over shouldn't own Japanese stocks.

Japan is still in a secular bull market that commenced in 2003, and despite its recent weakness, the Topix Index is building a good base around 1,200.

The majority of investors now have little interest in Japanese stocks, in stark contrast to the beginning of 2006. Investors then were influenced by the strong rally in the second half of 2005 and couldn't get enough of Japan.

The recent action is positive because it's relatively early; investors still have time to buy into this potentially very rewarding investment story.

Finally, the political situation in Japan remains murky, and former Prime Minister Junichiro Koizumi is greatly missed. The unwillingness of the current government to be more proactive with economic change will hurt Japan in the short term. It remains to be seen if Japanese authorities will be able to effectively navigate the economy back to normality (i.e., out of the deflation trap) and allow it to flourish once again.

On the other hand, if everything was politically harmonious in Japan, there would be no value opportunities.

On the global market front, markets continue to probe the proverbial wall of worry, seeking a way higher. It remains to be seen if this rally will stop soon or if we'll enjoy an explosive ride to the upside. I still expect more gains to come investors' way this year, although attention should be paid to the increased volatility.

When it comes to Asia, the big issue to which investors want answers is how to quantify the downside for Asian markets. Asia can drop 20 to 25 percent from current levels. This doesn't necessarily mean that it has to drop, but if things get ugly, this is how it should play out.

Any weakness in Asia--especially of that magnitude--will offer another opportunity to buy into this strong bull market.

By Yiannis G. Mostrous and Kate Zanoni
Editor: Silk Road Investor, Growth Engines
http://www.growthengines.com

Yiannis G. Mostrous is an associate editor of Personal Finance . He's editor of The Silk Road Investor , a financial advisory devoted to explaining the most profitable facets of emerging global economies, and Growth Engines , a free e-zine that provides regular updates on global markets. He's also an author of The Silk Road To Riches: How You Can Profit By Investing In Asia's Newfound Prosperity .

Yiannis_G_Mostrous 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