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Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Wednesday, March 23, 2011

Japan Shares

There has been a flurry of trader and investor interest in the Japan stock market in the wake of the extraordinary disaster which has befallen it. Players are now interested in the prospects of
higher share prices ahead as a battered nation seeks to rebuild after its losses. From a value
perspective, the market is as reasonable as it has been for many years. The market chart (link
below) shows a breakaway downside price gap which will eventually be closed, and also shows
that the market has stayed above recent years' support.

Most everyone knows the history of the Japan market over the past 30 odd years, and comparatively
few US investors have played this market aggressively over the years, save for special situations
and diversification requirements. I suspect this is true of other major financial centers beyond Japan.
What this tells me is that there are few investors out there who really know Japan and its economic
issues and companies very well. There may be excellent plays within Japan over the next several
years particularly as regards infrastructure and energy reconstruction, but if you want to join in
on the rebuilding "play", you probably ought to study up very hard first as you would with any
prospective turnaround situation.

EWJ shares chart.

1 comment:

Rich said...

You might find this useful as a guide to Japan. Longish posts, but well written.-