Interesting comments on Japan from Jim Grant via Bill Fleckenstein. Japan bears take note.
"Wow! Bidding-War Wooing in Japan:
Before making a final point about rampant speculation, I would like to draw folks' attention to something potentially worthwhile occurring in a place where speculation has been for the most part stamped out. A story in today's Journal titled "For First Time, Japanese Firms Face Foreign Hostile Takeovers" says that in two cases where a hostile bid has been made, a second, higher, offer has been made.
Jim Grant, the extraordinarily fine writer of Grant's Interest Rate Observer and several books, also runs a small-cap value fund in Japan and has regaled me with stories of how cheap assets are there. I've noted in the past that a handful of buyout funds have headed to Japan, and as this story says, a few hostile bids have occurred. But the fact that hostile bids are now being topped is, I think, an important data point.
Last fall I mused that it might be time to invest in Japan. I almost, but did not, commit some money there. That has been a bad decision thus far, because not only has that market done better, but the yen has risen. In any case, were I not so bearish on the ability of our problems to affect the world, I would certainly be putting investment dollars in Japan, and I intend to pay closer attention to all things Japanese prospectively. Yes, I know there are plenty of problems in Japan, but what matters is that in many cases, the prices there reflect those problems. It's just the opposite of what's going on here, where the prices reflect perfection, and the underlying fundamentals are anything but perfect." |
