Readers of this site know I think it makes sense to have a portion of a value investment portfolio in Japanese stocks. And that I think, in addition to being cheap, many Japanese companies offer a back door play on China.
You have to scroll down in Derek DeCloet's column in The Globe and Mail to see this point made -- he refers to Japan as a "sleepier way to play China." But read the entire column. It's good stuff. And it's timely with all the talk about the modest revaluing of the yuan.
DeCloet quotes a money manager saying something I've heard for several years -- that the stock exchanges in Shanghai and Shenzen list companies that are mostly garbage. About 90% are controlled by Chinese government insiders, corporate governance is lousy, and the accounting cannot be trusted. Any respectable Chinese firm lists on the Hong Kong and/or New York exchanges.
That's when the column, wisely, points readers in the direction of Japan.
In addition to all the other reasons to hold a few Japanese stocks in your portfolio, there's this: the Land of the Rising Sun stands to benefit if and when the Chinese really let the yuan loose.
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