Is now the time to buy Japanese stocks?
Ben Inker, head of asset allocation at value investor GMO, says it is. While the human cost of the earthquake, tsunami and nuclear disaster hitting Japan this month is obviously eye-wateringly high, he says investors must focus not on that dismal picture but on the long-term economic impact – which he says is unlikely to be very big.
Adding to the case for Japanese equities, he says, is the valuation question. He contends that Japanese markets looked cheap before Friday’s quake – and with stocks there down as much as 20% since then, they now look even cheaper.
Contrast that with stocks in other markets, which Inker takes to be vastly overbought and, perhaps, headed for a collision with the reality that risk perceptions are rising:
It is a right he evidently expects stocks to exercise sooner or later.
Also on Fortune.com:
- Bets against Japan multiply
- 5 sectors hit hardest by Japan’s crisis
- Why Japan’s mess doesn’t mean recession
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