Hi Jay,
I am really interested in your position (both opinion and investment-wise) on Japan, as I note here:
achamchen.com
that you sold your equity positions 11/03, you hold some Yen, and you borrow in Yen for investing in Canadian Trusts.
In favor of Japan recovery:
1. Proximity to India/China for trade
2. Domestic economy improving
3. Domestic demand up
4. Land prices appearing to bottom
5. Possibly at the and of a 13yr secular bear cycle that began in 1991
6. Low P/E for the Nikkei vis-a-vis the US
7. Japanese excel at Nanotechnology
OR
against Japan recovery:
1. Large holding of US T-Bills=large exposure to high $/weak US economy
2. China faltering will hurt Japan
3. Ageing society is too much of a drag on economy
4. Foreigners have been larger net buyers of Japanese equity, land, so Japanese don't believe in their own recovery
5. Japanese Debt, in GDP terms, is worse than US
6. Aside from Toyota, Canon, not many Japanese firms are doing as well as they once did (Sony, Mitsubishi Motors)
7. Japanese CAPEX is still low (witness Steel Partners forcing cash out of companies - in dividends by ramping ownership up then demanding dividends, or they'll Buyout)
8. High oil costs
Personally I have Yen cash but sold my Japanese equities which now look positively cheap against the high USD
EWJ, in USD terms, is back to Dec 03 levels, just like the US indexes, but while US indexes currently appear downward-trending, do you think the Japanese indexes could be at the start of a secular bull, whilst in a cyclical bear? Jay, what do you see? |
