While most investors are focused on how Japan is about to spiral into some sort of economic black hole, others are citing the opportunities. From a purely valuation standpoint, the Japanese markets now look very inexpensive when compared to their American counterpart. As the Shiller CAPE for the S&P surges over 24X the TOPIX now sits at 16X. This is a big change from the last 30 years when Japan’s markets were characterized by persistently bloated valuations. Dylan Grice of SocGen brings us the Shiller CAPE for the TOPIX (via Business Insider):
Obviously, there are many more factors at work here than just valuation, but on a relative basis it’s clear that Japan is inexpensive when compared to many other parts of the world. Most notably, America….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.