Bernard, See my note above on the best way to play the Japanese markets. Basically, I like a shotgun approach in the small caps, through a fund like DFA or JOF, when it sells at a discount.
I like both select large caps and many smaller caps. I have owned Nissan, Honda, and Nintendo for quite a while now. However, I think small cap is where the action will be. Basically, the fastest Japanese gorwth will take place at home, and in nearby Asia, not in the US as in previous decades. That is positive for the smaller cos. Also, there is little foreign investment in Japanese small caps. When a US or European fund wants Japanese exposure, they tend to buy Sony and bid it up to high pe ratios.
Also, many of the larger cos are tied with the weakening banking sector. The small ones are not. This is one of the few cases where it is better to be a borrower than an owner. Saving the banks will cost the govt. and large corps a lot of money, so the smaller cos. are freer of this pressure. MB |
