Investing in Japan

[WeiChiLoh]

1) Continual Yen devaluation

 

2) Lower tax regime going forward

 

3A) Inflation resulting in a CAPEX boom

 

3B) Inflation resulting in a shift in Japanese financial asset mix from bonds to equity, which should push the median multiples up

 

I realized that this is a value investing site, but I cant help but wonder if Japanese companies, specifically Japanese export-oriented companies, would be an interesting place to invest? The downside, in term of valuation, seems minimal as most of the companies are financially unlevered and is trading at reasonable multiples.

[randomep]

Welcome to the forum, this topic has been discussed in several threads, one of which is below:

 

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/japanese-stocks-where-to-start/

 

Japan is the textbook value play, but the best time to get in was 2011, of course that is with hindsight. I got in in 2012 when the exchange rate was 95yen on the dollar. Now it is 102 and pretty stable. I don't think it will go much lower because other exporting countries will then get crushed.

 

I am betting on a paradigm change in the collective mindset, currently a lot of smart money has been betting against the yen, Kyle Bass is the most vocal. If the consensus stops betting against Japan and there is some kind of multiple expansion, Japan won't be so undervalued and I should make a killing. That's my bet anyway.