Japan Stock Market

[450SEL6.9]

Has anyone invested in the Japanese stock market? I think property in the US, UK are overvalued and the Japan equities market seems to be picking up traction. The banking stocks have doubled, tripled in two years. One bank is up 1100%. Some investors think Japan has snapped out of its problems. I'm not so convinced. Any opinions?

 

[SDNR]

I have not previously invested in Japan - but that market has definately been undervalued over the past few years.

 

[Ahmed]

being undervalued is always good. lol, I know its not a major stock market and is less regulated than Japan, here in Dubai stocks are waaaaay over valued, stock for a grocery store is worth a major bluechip firm. So ya. being undervalued is a great opportunity

 

[450SEL6.9]

There seems to be a growing optimism in Japan and a belief that they've dealt with their problems, especially the bad loans in banking. Nothing seems to keep the share market down in Tokyo. The banking sector will likely make new highs very soon and will report the largest annual profit in history, exceeding 1989 levels. I think it's mostly based on costs control and merger synergies. The Japanese market looks expensive and the banks are overbought, but just won't retrace any gains. I really become annoyed at investment analysts trying to justify the valuations of Japanese banks. They continue to claim that the big lenders in Tokyo have a balance sheet as large as Citigroup, Bank of America, JP Morgan (I miss the Chase Manhattan name) and should be valued more in-line with their American peers without much regard for the quality of the respective balance sheets.

I know about the construction boom in Dubai. I didn't know the valuations had become so extreme in the stock market there. Maybe the same problems are occuring in China, not so much in the share market because that's being knackered by the fears of the Avian Flu, but in the general direct investment market. I'm concerned about Asian markets and the USA.

 

[Ahmed]

I know about the construction boom in Dubai. I didn't know the valuations had become so extreme in the stock market there. Maybe the same problems are occuring in China, not so much in the share market because that's being knackered by the fears of the Avian Flu, but in the general direct investment market. I'm concerned about Asian markets and the USA.

Average PE ratios are like 33, market growth can reach 200%-400%, that doest seem good lol, talking bout Dubai btw.

However. this problem is occuring in the local markets not the new international exchange we got over here which is very well regulated and is being said to be able to be at par with major financial markets in the coming period.

 

[450SEL6.9]

Avg. P/E of 33 is nearly as expensive as the S&P was at the height of the market. Perhaps you should take some money off the table. It probably hasn't topped out until everyone starts talking about how great the market is. When the local newspapers and magazines in Dubai make the stock market their front page story, then SELL and SELL short! There are so many crazy stocks in America too. Google is headed to $400, 450 and investors think it'll double its profits every year. It might become larger than Microsoft at this rate.

I've to do some homework on Japan. I'm not really convinced of the recovery and I worry about the American economy. The GDP numbers yesterday for the USA were good, but homeowners in America are financing their consumption with equity in their house. If the real estate bubble blows up in some areas, they're in deep trouble and the world economies might be as well.

 

[Ahmed]

Man what are you talking about, housewives are in the business taxi drivers too and it is in the front page of every newspaper and news website here. so ya, it is time to sell and sell short. Now dont start taking me to the next level cause im stll a rookie lol. BTW, in case your interested. the term "investor" doesnt count here. theyre all speculators.

Damn thing is like a casino over here.

 

[SDNR]

Ahmed, apart from the obvious oil-wealth in your country, what else is fueling that market - is it real-estate prices?

 

[450SEL6.9]

What am I talking about? I know that was a rhetorical question, but I'll answer it anyway. I'm talking about what things historically look like at a market top. If you're convinced that everyone is invested, find one group that isn't. When that group invests heavily and borrows heavily to do so, then it might topple. There must be some ultra-conservative money not currently invested. Market tops and bottoms are psychological more than anything. A psychology professor won the Nobel Prize for Economic Sciences in 2002.

I don't find housewives and taxi-drivers in the business too out of the ordinary. They invest in Hong Kong all the time along with clueless senior citizens. When stupid movie stars borrow at 20% to play the property market, that's for me the time to sell HK short. Ahmed, it's somewhat impressive that you don't get caught with your chips on the table in this casino yourself. When people live in bubble economies, very few can think rationally and continue to believe "things are different this time around" and a fall in prices is impossible. Ask your neighbours how many the market will keep going and going up. You might just make a lot of money if you keep a clear head when everyone else is crazy.

 

[Ahmed]

MAn, I was being sarcastic when you said "wait till its in the front pages then sell short" its already happening, this is what everybody is talking about wasnt actually saying whatever you said was wrong or whatever lol. Many clueless citizens are in the game, and they just dont know what the hell is going on. You talk to them about a price correction or a crash. They go like: "Never, this thing aint happening here". I mean cmon you throw a ball upwards and It would never keep on going that way. What goes up must come down eh?.

And i have my head cleared althought its still tempting for me to get in the thing. But I know I would be better off away from the whole thing for now.

Rob, Oil used to be the fuel for our economy, not anymore thought although it does play a major role since oil prices increased. Tourism has been a main factor for 10 years now. Government initiatives such as investment arms, you can also say real estate ya thats one of the main drivers in the economy.

Ill try and get you the main facts when I find em, and where does oil stand in the economy this period of time. But you can say the main factors are real estate, oil, and tourism.

The market were talking about has no economic benifit for the country or the state. Thats why there was another initiative of opening up an international financial exchange that should be able to be equal to major financial markets in the coming period. (www.difx.ae)

Oh ya, and Emirates Airlines counts to 18% of Dubai's GDP.

 

[SDNR]

Interesting Ahmed - tourism I know is a growing industry in the UAE - but one terrorist attack would be very harmful - and I'm sure Al Qaeda don't like you guys very much with your "westernized" lifestyle (whatever that exactly means).

 

[Ahmed]

What your saying is true, but hey, thats true to any other country also. If there were any terrorism attacks to be made, they wouldve been made long back. Thats IMO

 

[SDNR]

Sure Ahmed, I for one would love to visit your amazing country and I don't think there is any more risk travelling there than in Europe, the US, or Australia and Asia. But I probably would feel a bit scared to travel in Iran, Syria, or even Saudi Arabia - I don't think they like westerners very much.

 

[rammie]

Roberto,

I'm not sure how it is in countrys such as Syria and Saudi Arabia but I can try to explain the situation in iran to you since both my parents are from Iran. When there was a revolution in Iran in 1979 plenty of iranians moved to the U.S. since they didn't like the new regime. Today many iranians still want to move so that they too can live a more liberate life but for many of them it isn't possible, so they try to live as they could have done in the U.S. in Iran. Therefore the people itself is very liberate (unlike the reactionary government) and when the iranian habitants meet European ppl they treat them with a lot of respect. Some might be quite mad at the U.S. people though but to be honest with you it is quite rare.

 

[Ahmed]

Sure Ahmed, I for one would love to visit your amazing country and I don't think there is any more risk travelling there than in Europe, the US, or Australia and Asia. But I probably would feel a bit scared to travel in Iran, Syria, or even Saudi Arabia - I don't think they like westerners very much.

This is very untrue .. . There's a difference between hating the government and hating the people . I can tell you this for sure.

I for example, dislike Bush and his government (thats a polite way of saying hate btw.) However, many of my friends are westerners, being muslims or christians. So what your saying doesnt imply whether to me or any other person. However, you can find people that hate westerners the same way you find westerners that hate middle easters. So no biggie really.

Hope that does clear stuff for ya.

 

[SDNR]

Thanks for that Ahmed and Rammie. I think I should clarify my statement by telling you that I have some Iranian friends who have warned me in the past about travelling to certain parts of the middle east - I'm not paranoid but just precautious.

 

[Ahmed]

your not paranoid, and you dont seem so, they have their views thought, but I dont see them right, however u do get exceptions though .

To each his own.