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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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Top Customer Reviews
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 ›
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.
The author, Steven Towns, by his own account has lived and worked in Japan for over 12 years, speaks the language and knows the society and business culture. He is here to say tell the world in definitive terms and with solid evidence in support (7 pages worth of citations), what we who have lived there all suspect: Japan is the most misunderstood, under-rated and undervalued stock market there is.
Towns is an old-school value investor in the vein of the Graham-Dodd "Superinvestors". He quotes and uses methodologies from the likes of, off the top of my head, Warren Buffett, Walter Schloss, Peter Cundill, Martin Whitman, etc.. to plead his case. If these names mean anything to you, then it behooves you to read this. The Japanese stock market has so many companies trading near cash value and under book value it would make any value investor see stars. Benjamin Graham, were he alive today, would probably be pounding the table over Japanese stocks.
The entire book is a great read, but if nothing else, Chapter 6 and Chapter 8, the ones that deal with his Bullish Japanese Premise and Corporate Governance respectively are the most important in that they outline Towns' answers to all the Japan detractors arguments for being bearish on Japan's stock market and Japan as a viable economic leader-nation in general. I especially appreciate the fact that Towns managed to address the recent news concerning the Olympus scandal that is still fresh on everyone's mind.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 22 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
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