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Investing in Japan: There is no stock market as undervalued and as misunderstood as Japan Paperback – March 14, 2012
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About the Author
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Top Customer Reviews
Steven Towns starts off by giving an overview of the market from a value investors perspective. You won't find much discussion of technical analysis or buying on dips in this book. The focus is for investors who want to buy quality companies cheaply and hold for the long term.
The book then goes into the nuts and bolts aspect of Japanese equities. There are a lot of things about the Japanese market that can seem strange to a foreigner, pretty much every important aspect is discussed, from trading lots, and dividends to why companies list subsidiaries instead of spinning them off.
Two areas where this book really shines:
Busting the myth that Japan should be avoided
Discussing shareholder activism and shareholder rights in Japan
I have been working in investment banking industry in Japan for long time. I have never seen a book like this which well explains the Japanese undervalued stock market and Japanese corporate governance. I totally agree Steven's argument (i.e. significant undervaluation of Japan equities, unique corporate governance) and believe in the significant opportunity in investing in Japan.
However, I believe it is easy to understand the Japan's undervalued market but it is not so easy to unlock such undervalued stocks. Many activist investors tried to acquire Japanese companies in a hostile way in the past but most of the attempt were not successful. I believe people like Towns who understands the Japanese corporate culture very well may possibly take right investment strategy.
In the book, he also addressed typical concerns/ misconception by foreign investors (e.g. decreasing population, large government debt) . His arguments for such concerns are also quite persuasive. Japan is not a growth market but still in quite stabile economy and significantly undervalued compared to US or Euro companies.
Towns briefly covers the basics of value investing before plunging into the mysteries of the TOPIX (1&2) Mothers, and JASDAQ. If you are at all thinking about investing in mutual funds, ETFs, ADRs, etc., Towns' advice could easily save you the price of the book on your first buy. It seems that much of the market is traded very thinly, especially domestically (in Japan). Among the largest funds, there is not a single one, besides the Nikkei 225 and TOPIX index funds that focus on a domestic equity strategy. Compare that to the US, where there are probably more funds than stocks. Towns warns us that sales loads and fund fees often average more than 4% on Japanese funds, so even strong performance fails to attract interest from domestic investors.
Turning to stocks, "coverage of stocks has been on the decline, meaning ever fewer professionals are evaluating stocks based on fundamental value. Unlike developing markets, market measures are plentiful in Japan. One that looks interesting is the Dividend Focus 100 Index, well worth reviewing for its constituents.Read more ›
Most Recent Customer Reviews
Investing in Japan is a bright compendium for value investors searching for light and literacy in this most feared and misunderstood of equities markets. Read morePublished 17 months ago by James Ebert
I stopped reading this book half-way through as it was simply boring. The author included too many unimportant details, as if he needed "filler" information to get enough... Read morePublished on January 6, 2014 by Scott Osborne
Investing in Japan has proven a frustrating experience for a long time. While many investors have "thrown in the towel", or may be about to do so, Steven Towns' wonderful book... Read morePublished on June 6, 2012 by Oliver Mihaljevic
I bought this book out of Nate Tobik's recommendation, and I have to say Mr. Tobik's blog provides much more content and analysis than this book. Read morePublished on May 27, 2012 by Andy
just finished reading, and i must say that it was a bit disappointing. i do agree with all the things mr towns says about the misunderstood aspects of japan, but i wish there was... Read morePublished on May 12, 2012 by Reader