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Ignore the "Experts": 7 Reasons Not to Invest in Japan

July 10, 2010

[Editor's Note: Money Morning Chief Investment Strategist Keith Fitz-Gerald has spent portions of each of the last 20 years in various parts of Asia, and more recently has spent part of each year living in Japan. In fact, he's there right now. So he brings investors this latest report on Japan's economic malaise directly from that country.]

By Keith Fitz-Gerald, Chief Investment Strategist, Money Morning

 
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More on this topic (What's this?)
Why the Yen Is Set to Weaken (Jutia Group, 1/30/12)
Debt crisis 2012: Forget Europe, check out Japan (Investment Postcards from Cape Town, 12/27/11)
Japan has a Trade Deficit (Random Roger's Big Picture, 1/25/12)
My Golf Confession (My Wealth Builder, 1/20/12)
Read more on Investing in Japan at Wikinvest

Tags: Asia Investments, Japan, Nikkei, S&P
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5 Responses

  1. Gregory Marks | July 12, 2010

    An interesting article…I agree with you strongly concerning the lack of adaptability in Japan…I`d go further in saying that adaptability is now impossible…The Japanese have built a system or a social hierarchy that to dismantle would be unthinkable.. I would like to say that the Japanese elites totally believe that the workers of Japan can work their way out of this mess..Unfortunately the problem is that this `work` is unproductive and misdirected…Most of them are just chasing their tails…The vast majority so clueless about the international business world and so believing the good times just keep rolling if you only buy Japanese.. There is the fact that the Japanese are spending money like water…Money in fact they haven`t got.. They still honestly believe they are going to take over the world…In Tokyo salaries for totally unproductive salarymen are just too high…Over-employment is everywhere.. The real error and shame for Japan is that when they should have been making partnerships… racial prejudice and greed from their elites got in the way… I wouldn`t invest in Japan basically because of their fundamental inability to understand the world due to their racism and secondly the competition is sorry just getting better…

    Reply
  2. asd | July 15, 2010

    I'm not really an avid reader of this website, but from what I've been able to gather, I reckon I want nothing to do with the advice this website is giving.

    The reason Japan is in such dire straits is because they do not control their currency, they give it a free float and the Yen has been appreciating at a steady rate for a long time, thereby making certain industries uncompetitive compared to places like China. 3 years ago the yen was at 130 to 1 usd, now it is at 88 to 1 usd. How ridiculous is that?

    The fact that Japan is still able to remain so competitive speaks towards the quality of their products,the productivity of their people and the extent of their technology. If they are able to produce something that is in such high demand by the world when the price of the goods that are being sold in yen has essentially dropped by 40%, that says a lot about just how productive the japanese people are.

    The entire premise is just flat out wrong, and who are u to try and put judgement on the success of an entire country on what u THINK is the reason the Japanese are unsuccessful? It screams of ignorance.

    Reply
  3. Hiroyuki Une | July 22, 2010

    I'm japanese and living in Japan, I deeply agree to the words 'Don't invest in Japan'.
    Japanese people, from PM Kan to average one, are misunderstanding Japan's ability and position from the world-wide point of view.
    If we can't reform our society completely, The Japan goes down to the Pacific abyss.

    Reply
  4. TARA TAN KITAOKA. | August 2, 2010

    I AM A READER OF YR NEWLETTER, IN EVERY COUNTRY, THERE WILL BE A TIME FOR
    BUSINESS TO GO UP AND BUSINESS TO GO DOWN. INVESTING IN A COUNTRY WHERE
    THE COUNTRY HAS PROBLEMS OF ITS OWN IS A REAL BUSINESSMAN.

    GOING JUST TO PICK THE FRUITS WITHOUT PLANTING THE TREE IS NOT A INVESTOR
    OR BUSINESS MAN.

    PLS THINK ABT THIS.

    Reply
  5. Tom | August 14, 2010

    This article is totally exaggerating. Yes, Japan has a lot of issues, but these are about the same issues as in many Western countries (ageing society, rising global competition, dependence on exports, slow reaction of politics to real issues). Actually, Japan is better of than many Western economies – one example: Greece was going down because most of it's debt was with foreign parties that started to want their money back, so the system crashed – Japan's debt is to 98% with its own people, inside Japan. Their won't be any crash in Japan when foreign investors start doubting and asking for their investments back. And one more important aspect: Japan doesn't have the highest production cost in the world (that's in Europe; i.e. Germany). But there is no nation in which people work so hard as in Japan (believe, I've been to 40 countries). There is a common saying in Japan that "a Japanese man is married to his company … to support his wife/family" … the Japanese will work well their way out of any crisis. In my opinion actually they work way too hard.

    Reply


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