9 ms·
Bottom just fell out of Nikkei
- wheaties 16y agoTime to start buying. Bet Buffet is taking a look at all those wonderful Japanese companies who moats are wide, have good fundamentals, and produce reasonable free-cash flow. Hope his "itchy trigger finger" found a few targets. My IRA could use a boost after the last few years.
- awa 16y agoany recommendations? Toyota?
- ecuzzillo 16y agoToyota's stock is probably undervalued to begin with because of the stupid pedal thing, and this probably makes it extreme. Short-term traders need not apply, though.
- lionhearted 16y agoToyota's trading at 21 times earnings on the NYSE... that doesn't seem like a crazy bargain. (Or is there some parallel listing on the Nikkei?)
- patio11 16y agoToyota is listed on the Nikkei. The thing at the NYSE is called an American Depository Receipt (ADR). Basically, it is a coupon that says "Entitles the bearer to two shares of Toyota common stock in Japan." In principle, the two do not necessarily have to move in lockstep. However, because of the massive size, prominence, and stability of Toyota, one would ordinarily expect them to correlate extraordinarily heavily as anything else is an exploitable arbitrage opportunity.
- spitfire 16y agoVarious algorithmic traders play on these dual listings. Put a computer in between (in network terms) and you can trade ahead of the people in either japan or new york. and of course you can also do regular pairs trading (if they drift farther apart).
- jaydz 16y agoWhile watching CNBC today I saw a story stating Toyota had to close a few factories and had a lot of damaged inventory.
- dereg 16y agoYou're going to want to look for a company with the least exposure to Japanese demand. You also want to see which company's plants were most disrupted by the crisis. I had the data before, I no longer look at the car industry in Japan but do some research and you'll know. Not sure if this is the time to buy any Japanese equity right now though, it's a flight away from risk and investors are indiscriminate with their funds.
- deleted 16y ago[deleted]
- netcan 16y agoI remember buffet saying in some interview that Japan makes great products and has a great economy but they don't make great companies, from the investor's perspective.
- secretasiandan 16y agoYou must think markets are pretty inefficient. Can you explain why this is time to start buying? If you can explain why people are selling so much so fast right now, that might help your argument.
- wheaties 16y agoYes and no. What I see is all of Japans equities moving in lock step regardless of where their manufacturing or distribution centers are actually geographically located. Much like Toyota or one of our own blue chips some of these companies are headquartered in Japan but exist all over the world. Those are the companies whose fundamentals do not reflect an equities plunge like we are seeing.
- colinplamondon 16y agoThey are inefficient - that's the entire basis of George Soros' investment strategy.
- secretasiandan 16y agoefficient > slightly inefficient > inefficient > pretty inefficient My comment was not meant to start a conversation about the meaning of efficient markets, but to get wheaties to explain his reasoning.
- travisp 16y agoDid you buy two years ago? Because the Nikkei was lower at various points in 2009 than it is now. If not, why is this valuation better? It's almost certain that Buffet would be actually analyzing these stocks rather than just jumping in because people may be being fearful.
- citizenkeys 16y agoThere's no better time to buy stocks than during a market panic. Japan is a wealthy country. The Japanese work ethic is unbeatable. Now is a great time to buy Japanese stocks.
- kelnos 16y agoBe careful. Good work ethic doesn't always mean business success. The two are correlated, but that doesn't suggest that tossing money at any Japanese company is the way to go. Still do your due diligence and only invest in solid companies. This is certainly an opportunity, but not a reason to be irresponsible.
- citizenkeys 16y agoHere's a list of companies "from or based in Japan": http://en.wikipedia.org/wiki/List_of_companies_of_Japan http://en.wikipedia.org/wiki/List_of_companies_of_Japan Sony, Toyota, Honda, Nintendo, etc. Japanese companies like these that were a great investment a week ago are still a great investment. Only now the stock is less expensive because of a temporary panic. Smart money is buying up all the stock possible for these companies before they can rebound.
- PakG1 16y agoThe big question is how the operations of each of those companies is affected. If operations are hugely impacted and would require time to rebuild, their stocks will not rebound so easily.
- kelnos 16y agoGood point, but if you consider corps like those mentioned by the parent, they are clearly internationally-diversified companies. If their operations in Japan alone are impacted, it's cause for concern, certainly, but the company as a whole is likely none the worse for wear, and this is just Mr. Market overreacting as he likes to do.
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- elliottcarlson 16y agoCan someone share the best way to enter the stock market for someone who is completely clueless on stocks in general yet wanted to dabble in them for quite some time?
- deleted 16y ago[deleted]
- idlewords 16y agoPretend you have $100K and set up a fake portfolio, and play with that for a bit. Meanwhile put aside a few thousand dollars you can afford to lose, and when you're comfortable enough with managing your fake portfolio, start investing for real.
- mleonhard 16y agoI used http://www.howthemarketworks.com/ http://www.howthemarketworks.com/ for about half a year and learned that making money on stocks is very difficult.
- theoj 16y agoI used Virtual Stock Exchange for a test portfolio last year. http://virtualstockexchange.com/Game/Homepage.aspx http://virtualstockexchange.com/Game/Homepage.aspx
- radicaldreamer 16y agoI'd be very careful, if you're not experienced at all, you could get wiped out pretty easily in a market with this much volatility. A lot of people would've said today's trading session was a great day to buy, but look what happened. This is what they call a Black Swan event and nobody's sure that we've seen the bottom yet. Edit: If you want to see an example of how these drops can be deceiving and might not represent the true bottom, look at Citi's chart: http://finance.yahoo.com/echarts?s=C+Interactive#chart2:symbol=c;range=5y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined http://finance.yahoo.com/echarts?s=C+Interactive#chart2:symb... You don't want to be the guy who bought a large long position when the PPS was $20, thinking it would easily jump back up to 30 or 40.
- alanpca 16y agoHow does one invest in the Nikkei 225 in the USA? I'm looking for an Exchange Traded Fund (ETF) type of deal. I see that there are a couple mutual funds (UJPIX) but I'm more interested in something on one of the US markets.
- mwytock 16y agotake a look at EWJ: http://us.ishares.com/product_info/fund/overview/EWJ.htm http://us.ishares.com/product_info/fund/overview/EWJ.htm
- marcusestes 16y agoGood idea. iShares markets an ETF called the Japan Index Fund that tracks a broad range of indexes: http://us.ishares.com/product_info/fund/overview/EWJ.htm http://us.ishares.com/product_info/fund/overview/EWJ.htm
- wtn 16y agoIt's a good question to ask, but if you have to ask it, you should probably spend more time learning about global financial markets before you take action.
- josh33 16y agoCareful. Japan's debt level, when compared to GDP, is higher than US: http://www.economist.com/blogs/freeexchange/2011/03/sovereign_debt http://www.economist.com/blogs/freeexchange/2011/03/sovereig...
- phlux 16y agoand they just lost ~1 trillion ++ worth of infrastructure... I believe they have a 10 year rebuild in front of them. This is assuming that we have hit bottom on the catastrophe over there now and that we can contain the Daiichi plant. It would be very interesting though, if things turn south and some massive takeovers occur in the next 12 months. Imagine companies like Fujitsu, Hitachi or others (my mind is blank) being bought up by the IBMs Apples or even Google or GASP facebooks (those who have a lot of cash to buy tech houses in Japan and picot into HW?) Pure fantasy sure - but so was the SCIFI scenario we are now looking at today, just last week.
- dereg 16y agoCurrency? Do you have a source on revised infrastructure damage figures, because I've only seen $100-150 billion estimates by some insurance companies.
- masklinn 16y agoChristchurch is $12b, and there have been whole cities leveled in japan, a whole prefecture is majorly affected if not downright destroyed. $150b seems very low.
- Ratfish 16y agoThe Christchurch figure is a debatable one, as the government is talking it up so as to justify an asset sale (national park mining and power companies are current favourites) while the true figure seems unknown (I can't find a good source, any you know of?). The EQC only pay part of some claims, but here are their stats http://canterbury.eqc.govt.nz/repair-replacement/progress http://canterbury.eqc.govt.nz/repair-replacement/progress
- mixmax 16y agoThe Nikkei is now at a ten year low
- tansey 16y agoNo it's not... it's not even at a 2 year low.[1] [1] http://finance.yahoo.com/echarts?s=^N225+Interactive#chart2:symbol=^n225;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined http://finance.yahoo.com/echarts?s=^N225+Interactive#chart2:...
- mixmax 16y agoThe Nikkei 300 is, you're linking to the nikkei 225. The nikkei 300 index is "The Nikkei 300 is a market value-weighted index of the 300 major issues on the first section of the Tokyo Stock Exchange (TSE). The Nikkei 300 uses a weighted average based on market capitalizations of component firms to reflect movements in the overall value of first section stocks. This contrasts with the widely followed Nikkei Stock Average which is an average price and is suitable for monitoring the level of the market and its changes.(1)" The Nikkei 225 index is "The Nikkei Stock Average is the average price of 225 stocks traded on the first section of the Tokyo Stock Exchange, but it is different from a simple average in that the divisor is adjusted to maintain continuity and reduce the effect of external factors not directly related to the market(2)" Nikkei 300 on Google finance: http://www.google.com/finance?q=TYO:1319 http://www.google.com/finance?q=TYO:1319 Sorry for the confusion. (1) http://e.nikkei.com/e/fr/info/nifaq/300.aspx http://e.nikkei.com/e/fr/info/nifaq/300.aspx (2) http://e.nikkei.com/e/fr/info/nifaq/225.aspx http://e.nikkei.com/e/fr/info/nifaq/225.aspx
- nandemo 16y agoNikkei 300 is not widely used. Without qualification, "Nikkei" is taken to mean "Nikkei 225".
- tnorthcutt 16y agoTo be fair, it was almost at a 10 year low before the earthquake, and is barely lower now than it was in August.
- mikebo 16y agoBe careful - "John Mauldin: Japan Is a Bug Searching for a Windshield" http://www.fool.com/investing/international/2010/07/22/john-mauldin-japan-is-a-bug-searching-for-a-windsh.aspx http://www.fool.com/investing/international/2010/07/22/john-...
- dsl 16y agoA smart man no doubt, but taken out of context for the current discussion. He is talking about long term deleveraging in many different countries. His outlook for the US is just as grim.
- chailatte 16y agoThis will trigger deleveraging around the world. Specifically, this will impact the venture capital in silicon valley. We'll likely start to see some angel/vc investors start to panic and withdraw from the market, shutting down startups, etc.
- jswinghammer 16y agoWait what? There was a massive deleveraging event a few years ago and I don't remember VCs being forced to withdraw money from startup accounts. How would they do that anyway? Once they invest the money the money belongs to the company they invested in. They might be forced to sell shares I guess but they can't just take someone's money.
- mediaman 16y agoChailette doesn't say they would withdraw money from startup accounts: "angel/vc investors start to panic and withdraw from the market" presumably means that startups could be deprived of the next financing stage, which, if they're still burning cash, will shut them down.
- idlewords 16y agoThat is some serious narcissism right there, congratulations.
- chailatte 16y agoYou read the post wrong. 'Specifically' is used to address how this will affect the startup industry, which pertains 'specifically' to this forum.
- deleted 16y ago[deleted]
- bradly 16y agoWouldn't the money pulled out of Japanese markets be invested in other markets?
- blhack 16y agoIt seems like everybody in this thread is saying "No duh, invest in Japan right now!" The assumption is that the market will turn around, and anybody who buys into Japanese companies stands to make a lot of money. If this is the case, then why are the prices going down at all? Are other investors really that ignorant?
- msbarnett 16y agoI think the general belief is that they are being irrationally over-pessimistic due to panic over the daiichi situation, and that this can be exploited by people whose distance affords them a more cool-headed approach. The market as a whole may be rational, but individuals in the middle of a tense situation probably won't be.
- jarek 16y agoI think part of the assumption is that people tend to trade less than perfectly when they think a radioactive cloud might be heading their way. Right now a lot of the losses are due to uncertainty, people are factoring in risks of the unknown, potential worst case scenarios etc. If you buy in expecting the market to go back up, you are essentially betting the situation won't end up as bad as feared right now.
- AngryParsley 16y agoExactly. People who make fortunes off these markets are selling. Either they're wrong or posters here are. Guess which option is more likely. I think the LessWrong post Markets are Anti-Inductive explains it well: http://lesswrong.com/lw/yv/markets_are_antiinductive/ http://lesswrong.com/lw/yv/markets_are_antiinductive/
- purewater 16y agoThanks for posting this. I like to buy into crashes (with some safety margin if I'm wrong). +$4k on the SGXNK so far because of your great timing! :)
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- pero 16y agoDisasters like this are, in theory, actually beneficial to economies--especially stagnant ones like Japan's. The capacity for immediate bonafide economic growth has been diminished but that doesn't mean that economic production will decline. There is now ample room to deploy all that surplus capital (humans, machinery, money) that was previously unproductive. The upper echelones of the financial sector will make a killing shorting and re-buying. Advanced reading on a parallel concept: http://www.irows.ucr.edu/conferences/globgis/papers/Arrighi.htm http://www.irows.ucr.edu/conferences/globgis/papers/Arrighi.... The quoted and cited David Harvey piece (2007, albeit the condensed article veresion and not the full-length book) would have been a better reference however is apparently no longer online. This, though, is amazing: http://www.youtube.com/watch?v=qOP2V_np2c0 http://www.youtube.com/watch?v=qOP2V_np2c0 I believe Naomi Klein made a good buck on dumbing down and re-orienting the above hypothesis.
- orangecat 16y agoDisasters like this are, in theory, actually beneficial to economies In very bad theories, yes.
- pero 16y agoOr very poorly architected economies?
- carsongross 16y agoOnly an economist can consider a theory like that for more than a few seconds and not laugh hysterically. As Tom Woods has said, following this logic, the best thing we could do for our economy is build a huge armada of amazing battle ships, have Japan do likewise, then float them to the middle of the pacific and, after evacuating them (surely, the loss of human life is not a necessary component in this economic model, is it?) blow them all up. Rinse, wash, repeat. We're all rich!
- pero 16y agoEmpiricism is not on your side. The richest country in the world spends more than its fair share on 'a huge armada of amazing battle ships', actually, as much as everyone else on the planet put together, and also actively seeks out remote spots of the planet to blow stuff up in. Rinse, repeat, very rich.
- printerjam 16y agoThis is a tough bet. My first reaction was, "They are going to open up their wallets and spend like crazy to rebuild." Then I heard on the news that Japan runs a massive fiscal deficit and I thought, "Where are they going to get the money." When the market cools, it might be good to pick individual stocks (construction and pharma come to mind). Right now though, staying out of the broader market (index funds, etc.) might be prudent.
- commanda 16y agoThe ad I saw on the right side seems highly inappropriate. Or, perhaps, appropriate - I'm not sure. http://adb.nikkei.co.jp/ad/logo/2008b/NikkeiWeekly080722-NNILargeRect.gif http://adb.nikkei.co.jp/ad/logo/2008b/NikkeiWeekly080722-NNI...
- steveplace 16y agoREMEMBER: This is probably not the best place to get investment advice. Everyone's got an opinion but it's different when you've got actual cash on the line.
- travisp 16y agoThe Nikkei is still higher than it was two year ago.