10 Reasons I Am Thinking About Japan

December 22, 2010 12:00pm by Barry Ritholtz

As of late, I have been intrigued by Japan. It is a part of the world that investors seem to detest ignore, despite signs of technical improvement.

I’ve talked about this in the office, and with some of our clients who either own specific Japanese names — or live there. The thought process is Japan is a potential surprise in 2011.

I first spotted this on FusionIQ; The reason was due to it flipping back and forth between a Neutral and a Buy in October. EWJ is a VERY interesting chart — much more so than the Nikkei Dow; EWJ is in a nice uptrend that slipped over its the December 2009 highs earlier this month; It just got over its April 10 highs this week.

Here are 10 Reasons I want to own some Japan for 2011:

10 Reasons to Think About Japan

1. Everyone seems to hates — or just ignore — Japan as an investment; its widely disliked for its bad demographics, aging population, ongoing MULTI-DECADE recession.

2. The chart! Nice uptrend, new highs.

3. Institutionally and on Main Street, Japan is VERY under-owned.

4. The island nation is still the 2nd biggest economy in the world in real (not nominal GDP) dollars; they are a huge exporter, and an industrial powerhouse.

5. Proximity to China: As it grows, Japan has easy access to even cheaper low end manufacturing. The high value engineering and design work stays in Japan, but the toxic smokestack industry moves to the mainland.

6. Improving global economy could help Japan’s export business.

7. If China rescues Europe, Japan benefits.

8. The country has shown long term resilience to misfortune — the only nation to be nuked (2X!)

9. Modern infrastructure, highly educated, excellent work force; forward thinking gadget-head consumers.

10. Consumer prices are anticipated being flat next year — the 1st time after 3 years deflation.

And did I mention I like the chart ? Note how many times EWJ got turned back at $11. What would get me really excited was a high volume breakout over $10.90-11.

EWJ iShares Japan (10 Year Weekly)

EWJ iShares Japan (12 Month (Daily)

All charts courtesy of FusionIQ

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client. References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers Please see disclosures here: https://ritholtzwealth.com/blog-disclosures/

twitter

facebook