No net-net but ... NTT (JP:9432)

Company Overview

Established as a government owned monopoly  in 1953, Nippon Telegraph and Telephone Public Corporation ( Nippon Denshin Denwa Kōsha) was one of the first telecomunication businesses to be privatized (1985 ). The aim was to encourage competition in the telecomunication market. In 1987, NTT made the largest public stock offering to date, at US$36.8 billion.

Japan to become a economic featherweight in 2050?

Today I stumbled over an article on the Japan blog of the WSJ. I am rather used to gloom and doom news about Japan, but the crescendo of the doomsayers was surprising, even to me.

The article refers to a paper of a japanese think-tank called " the 21st Century Public Policy Institute", which is connected to Japan’s main business lobby Keidanren.  Predictions by econonists and political scientist are always viewed by me with great suspicion (especially when payed by special interest groups) . What makes it even more vaxing is, that our dearly loved "scienitsts" trying to predict the state of the japaneses economy in 2050! That's a rather bold endeavour, to say the least, when one considers that those "scientists" usually don't even get a country's GDP numbers for the next quarter right.

Basically, this think tank is taking the already very well known challenges Japan is facing (shrinking workforce, high government debt, poor growth prospect), extrapolating those trends and predicting the most likely outcome for Japan's economy in 40 years.

I do faintly remember when extrapolating a trend was tried on Japan before. So what happend to Japan's world dominance, predicted by those think tanks in the late 80's, which should be upon us by now? I tell you. All there econometric models always underestimate the powerful forces of the good old reversion to the mean.

So what are they predicting now. Simply put, Japan will be economicaly marginalised and will not be part of the club of developed countries anymore by 2050! What a difference 20 years make.

http://blogs.wsj.com/japanrealtime/2012/04/24/japan-to-go-from-economic-heavyweight-to-featherweight-by-2050/

What a depressing start into the day. So you can imagine how surprised I was to find an article, that dares to contradict the chore of doomsayers on Japan. And again it's Eammon Fingleton. As I mentioned before, I don't agree with many of Fingleton's economic arguments regarding the state of Japan's economy. But I do like his boldness to swim against the tide and his common sense aproach to a complex topic.

http://www.forbes.com/sites/eamonnfingleton/2012/04/23/will-the-real-japan-please-stand-up-2/

It seems that, at least for now, Japan is still a heavyweight when it comes to bailing-out europe via the IMF.

Fingerübung - Co-Cos (JP:3599)

And here we go. Another japanese net-net stock.

Co-Cos hasn't got an english internetpage. I have to rely on data from Businessweek and  MSN Money. 2012 numbers out on its internetpage (japanese).

Hogy Medical (jp:3593) - Hasn't always to be a net-net

Company Overview

Hogy Medical Co., Ltd was founded in 1955 and is headquartered in Tokyo, Japan. Hogy Medical is one of the top players in the japanese nonwoven surgical-use disposable products market. Beside mekkin bags, it engages in the manufacture and sale of sterilized nonwoven fabric, like (among other things) surgical gowns, drapes, caps, underwear and equipment covers.

Furthermore it offers Opera Master, a product, logistics, and information management system centering around full-kit products. A kit is a packaging of the precisely required medical supplies for a surgical procedure, clinical test or clinical procedure. An example would be a sterilised catheter, syringe and scalpel in a sealed sterile pouch. Each kit is customized for specific doctors and types of surgery.

Thus, Opera Master is a solution-based system, incorporating product-, logistic- and information management, and is designed to help hospitals improve operating efficiency, reduce inventories and control costs.

Why I do not hedge my currency exposure

When buying individual Japanese stocks an investor is not only buying a stake in the underlying business of the company but also the japanese yen. Therefore one is not only exposed to the risk of stock price fluctuation but also to the yen's volatility against ones home currency. This fluctuation can be favourable or not and, given the recent high volatility on the forex markets, will definitely have a material impact on the investment results.  It is possible to hedge the currency risk via options or derivatives quite easily, but it costs you money (e.g. the so called insurance premium) and the hedge position is exposed to counter party risk (e.g. the risk that the counter party is not willing or able to fulfil its contractual obligation).

Komatsu Wall Industry (JP:7949)

Another Japanese net-net. Here I've got the problem  that Komatsu Wall hasn't got an internetpage in english. So I have to trust the numbers on Businessweek or MSN, which are usually quite reliable (except for shares outstanding!).

Is Japan's lost decade a myth

At the beginning of this year there was a really interesting discussion regarding Japan's economic situation developing.  Eamonn Fingleton, a former Forbes and Financial Times editor, was questioning the prevailing opinion about  Japan's lost two decades by the media.