The Globe and Mail has an article on value investors finding bargains in Japan. Among those profiled is someone familiar to Controlled Greed regulars:
Tim McElvaine, president of McElvaine Investment Management Ltd. in Victoria, had already been buying Japanese stocks before the earthquake, but added more afterwards as their prices fell. He is upbeat on their potential as a result of Japan's decision to inject more liquidity into its financial system following the earthquake.
"It doesn't mean that the stock market won't go down in the short term, but when you have cheap valuations and lots of liquidity, that is a good set up," said the deep-value investor who is just back from a trip to Tokyo last week. "Japan is back to levels that rival the lows of the last decade."
Mr. McElvaine recently snapped up shares of Japanese electronics giant Sony Corp. for the foreign content portion of his Mackenzie Universal Canadian Value Fund and his McElvaine Investment Trust. "This is as cheap as Sony has been in the last 10 years," he said. "It trades below book value."
He also bought shares of Shinsei Bank Ltd., cosmetics maker Pola Orbis Holdings Inc., investment firm Ichigo Asset Management Ltd. and soy-sauce maker Kikkoman Corp.
Kikkoman stock has been hurt because of worries about foreigners eating less Japanese food and the impact of rising soybean prices on margins, he said. "From my point of view, it is a strong global franchise."
My only direct exposure to Japan is through NKSJ Holdings, a property & casaulty insurance company I've owned for ages. It has gotten hammered since the disaster. I've thought about adding to the position, or buying some other Japanese stocks. I'll post any moves -- in or out of Japan -- that get made.
Right now, my portfolio has a lot of gold and gold miners, cash and several stocks. Not quite one-third of assets in each of those, but somewhat close. And it feels like a good place to be for now.