I came across this online today and thought it might be worth a read. Currently, only 6% of my portfolio is invested in Japan, but being able to visualize the top 25 companies in the country is quite insightful for me, so I thought others might find it as well. https://www.visualcapitalist.com/visual ... arket-cap/
I also like these market cap visualizations. Keep in mind that the total of every box you see on that page is right around the current market cap of NVDIA (which 10 years ago had a market cap of under $11 billion, lower than any single company on that page now). In relative terms the market caps of these very prominent Japanese companies are not very large.
Japan is benefitting from a double whammy right now:
1. The Weak Yen, which is due to the high foreign interest rates, makes Japan look extremely cheap to foreign investors, increasing foreign demand for Japanese Equities - Warren Buffett, et.al. - 30% Bargain Sale!
2. The New NISA scheme has brought new domestic investors to the market, increasing domestic demand for Japanese Equities.
Hence, the sudden rise to new record highs for the Japanese Indices.
The multiples of Earnings or Cashflow of Japanese Equities are lower than their US counterparts...
and
3. Japan is undergoing a gradual improvement in Governance of companies, bringing them more in line with international standards, slowly, but will improve the perception of Japanese companies in the eyes of overseas investors over time.
Last edited by Tkydon on Sat Feb 24, 2024 6:17 am, edited 1 time in total.
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This Guide to Japanese Taxes, English and Japanese Tai-Yaku 対訳, is now a little dated:
Very little of the new NISA money has gone into domestic equities. I think I saw a comment that 90% of the equity fund sales have been overseas equity funds.
Deep Blue wrote: ↑Sat Feb 24, 2024 4:58 am
Very little of the new NISA money has gone into domestic equities. I think I saw a comment that 90% of the equity fund sales have been overseas equity funds.
Agreed. I don't think too many newbie investors are going to start with buying Itochu or SoftBank stocks.
Tsumitate only allows funds, of course, so the choice is limited by the government's attempt to gently guide people towards toushin.
Aiming to retire at 60 and live for a while longer. 95% index funds (eMaxis Slim etc), 5% Japanese dividend stocks.
Deep Blue wrote: ↑Sat Feb 24, 2024 4:58 am
Very little of the new NISA money has gone into domestic equities. I think I saw a comment that 90% of the equity fund sales have been overseas equity funds.
I myself only invest 6% in Japanese equity. The rest of my portfolio is in US stocks (83%), India (0.5%), developed countries (10%), and developing countries (0.5%). I know it's not diversified enough, but I don't feel comfortable reducing my US holdings for investments in the rest of the world.
Deep Blue wrote: ↑Sat Feb 24, 2024 4:58 am
Very little of the new NISA money has gone into domestic equities. I think I saw a comment that 90% of the equity fund sales have been overseas equity funds.
Must be the foreign investors making out like bandits then
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This Guide to Japanese Taxes, English and Japanese Tai-Yaku 対訳, is now a little dated:
Plenty of Japanese people, companies and organizations hold Japanese equities and they have indeed been making out like bandits. I just wanted to push back on the notion that it’s new NISA buying that’s driving the market higher as that’s manifestly not true.
FWIW I believe it’s a combination of the weak yen(which boosts profits in aggregate), a stronger than expected global economy (mostly US) and sharply improving corporate governance/capital allocation by Japanese companies.
