Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Japanese Nikkei Hits 26-Year Low: Stock Market Bargains Galore …

Stock-Markets / Japanese Stock Market Nov 04, 2008 - 11:58 AM GMT

By: Money_and_Markets

Stock-Markets

Best Financial Markets Analysis ArticleTony Sagami writes: Black Monday, October 19, 1987, seems like a long, long time ago, doesn't it? The Dow plunged from 2,246 to 1,738, losing a whopping 22% in a single day.

I was a retail stockbroker at the time. And it was ugly. Really ugly.


Now I'm starting to hear lots of comparisons and concerns that we might be moving towards another 1987-type drop.

I do believe that the U.S. market is headed for more trouble. Yet the Dow is still five times higher today than it was on Black Monday.

The Japanese, however, can't say the same thing about their market.

The Nikkei 225 Average Hits a 26-Year Low …

The Nikkei has lost more than 20% of its value in the last month and is down by more than 40% for the year, capped by a 9.6% one-day loss last week. That put it lower than it was back in October 1982.

Things are so bad in Japan that its new Prime Minister, Taro Aso, described what is happening as “a harsh storm seen only once in 100 years.”

Aso, who has been in office for less than two months, is combating Japan's economic weakness with an aggressive stimulus package to prop up the stock market and stimulate consumer spending.

The package includes:

'A harsh storm seen only once in 100 years.' – Japanese Prime Minister Aso
“A harsh storm seen only once in 100 years.”
- Japanese Prime Minister Aso
  • 2 trillion yen of direct payments to every Japanese household. A family of four will receive a check for 59,454 yen (US$600) to encourage consumer spending …
  • 5 trillion yen in new government spending on infrastructure and public works projects …
  • 2 trillion yen for a bank rescue payment to encourage small business lending …
  • Cutting expressway tolls …
  • New tax breaks for mortgage loans …
  • Extending a tax cut on capital gains, and …
  • Tax credits for child and elder care.

Will the Japanese government's stimulus package work? Only time will tell.

But I Think There Are Now Plenty of Bargains in the Japanese Stock Market!

If the Dow dropped to its 1982 lows, it would be at 895 today. Yes, 895!

Thank goodness our market has held up better than that. But what would you do if the Dow was below 1,000?

Would you sell everything and head for the hills? Or would you consider it to be the buying opportunity of a lifetime?

I'll tell you what I'd do: Jump in with both feet and buy, buy, BUY!

And right now, I'm suggesting that Japan represents a similar opportunity.

If you agree, here are …

4 Ways to Invest in Japan …

  1. Japanese Mutual Funds : There are dozens of no-load mutual funds that invest in Japanese stocks such as T.Rowe Price Japan (PRJPX), Fidelity Japan (FJPNX), or the Japan Fund (SJPNX).
  2. Japanese ETFs : If you're more of an exchange traded fund investor, there are several ETFs that focus on Japanese stocks such as iShares MSCI Japan Index Fund (EWJ), WisdomTree Japan Total Dividend (DNL), streetTRACKS Russell Nomura Prime (JPP), and streetTRACKS Russell Nomura Small (JSC).
  3. Japanese stocks listed in Tokyo: It's easier than you think to invest in Japanese stocks thanks to discount brokers like E*Trade. You can trade on six different foreign markets, including Japan, at E*Trade for only $21.95 per trade. You don't have to open a fancy or complicated account either.
  4. Japanese stocks listed in the U.S.: You may not realize it, but there are dozens of Japanese stocks that are listed on the New York Stock Exchange or Nasdaq.

    Examples include: Canon (CAJ), Hitachi (HIT), Honda (HMC), Kubota (KUB), Mitsubishi Financial (MTU), Nintendo (NTDOY), Panasonic (PC), Toyota (TM), and Sony (SNE).

Let me tell you a little about Sony …

Sony just reported a 72% drop in third-quarter profits and chopped its forecasts for the rest of the year.

That's because Sony, like all Japanese exporters, is suffering from lower global demand and a rising yen. A stronger yen hurts exporters by raising the price of their goods overseas, reducing the yen value of profits earned abroad.

What's more, Sony's stock has taken such a thumping that it is now trading for less than its book value. Yup, the value of all of Sony's buildings, equipment, land, and other physical assets is worth more than its total stock value!

In fact, the market value of all of Sony's shares is around $21 — about 60% of its underlying book value.

Sony isn't the only Japanese stock trading below book value, either.

Am I suggesting that you rush out and buy a bunch of Sony or any other Japanese stock?

No. Only you can decide what's right for your own portfolio and investment needs. As always, you should do your own research before you make any decisions.

But I DO suggest you take a very close look at Japan right now. Because a few seeds planted there could grow into some mighty big winners in a few years.

Best wishes,

Tony

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2022 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