# Japan Reawakens - The End of the Beginning?



## RichKid (13 May 2006)

With the Nikkei finally leaving that technical chart base and things beginning to look rosy again, especially with the spotlight on neighbouring China, I thought it apt to have a look at this Asian juggernaught, plenty of opportunities imo as we approach full stride in what is shaping as the Asian Millennium (sorry, just made that up, guess I shouldn't dabble in predictions): http://www.time.com/time/asia/magazine/article/0,13673,501060320-1172783,00.html


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## nizar (13 May 2006)

*Re: Japan Re-awakens- The End of the Beginning?*



			
				RichKid said:
			
		

> With the Nikkei finally leaving that technical chart base and things beginning to look rosy again, especially with the spotlight on neighbouring China, I thought it apt to have a look at this Asian juggernaught, plenty of opportunities imo as we approach full stride in what is shaping as the Asian Millennium (sorry, just made that up, guess I shouldn't dabble in predictions): http://www.time.com/time/asia/magazine/article/0,13673,501060320-1172783,00.html




Yeh im thinking the same thing. Got into a Jap managed fund about 6 months ago, not very happy so far, ive only broken even, but over the longer term, i think Japans turn has finally come again, and the sun may begin to rise there..


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## Sean K (14 May 2006)

*Re: Japan Re-awakens- The End of the Beginning?*

Platinum Japan and Platinum Asia funds are worth looking at. Seems to have an excellent team who have so far produced the goods. Highly rated by fund analysts Morningstar and Lonsec.

I hold both and will be adding more.


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## MARKETWAVES (14 May 2006)

*Re: Japan Re-awakens- The End of the Beginning?*

* 1 **CHART ..........* 5-12-06

--------------------------------------


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## x2rider (14 May 2006)

*Re: Japan Re-awakens- The End of the Beginning?*

hi folks
 I just put a bit of coin into the Equinox Asia 2, fund . The fund has a spread of 
 Japan macro   10%
 sparx korea      10% 
 golden China     10%
 Ashmore fund 10%
 WS japan fund    10%
 Asian multi-stratergy   10% 
 Vision  Fund  40 % 
 the Last two are Diversified funds and the others are specialist funds . 
 This seems to be able to give me some good exposure to the asian economies and the ability to be able to leverage in was also a help . With the other fund i have in Australia maybe it's time to have a look at Europe . ?
 I don't have the urge to invest in the physical shares of Asia . Basically because I have a hard enough time in Australia 
 Cheers Martin


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## Sean K (14 May 2006)

*Re: Japan Re-awakens- The End of the Beginning?*

Hey Martin, got a link to that fund on the web? Kennas


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## x2rider (14 May 2006)

*Re: Japan Re-awakens- The End of the Beginning?*

Hi Keenas 
 The link is www.macquarie.com.au/equinox. I think this fund is closed but they have them about every 6 months . I went and had a look at some of the funds just by themselves and on the whole had a pretty good return. There is a bit of Data on the equinox 1 fund but it is pretty limited because of it's start  up time frame. 
I just sort of have the fund as a piece of mind thing. 
The to best funds within this are the ;
Golden China fund which has just started this 1yr return is 32.77 since july 04 
Sparx Korea 32.12yr return  per yr been going since dec 03 
Japan macro fund which is 20.02per yr for the last 5 yrs 
Hope that helps. Just drop me a line if you need to know more.

 Cheers Martin


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## RichKid (14 May 2006)

*Re: Japan Re-awakens- The End of the Beginning?*



			
				kennas said:
			
		

> Platinum Japan and Platinum Asia funds are worth looking at. Seems to have an excellent team who have so far produced the goods. Highly rated by fund analysts Morningstar and Lonsec.
> 
> I hold both and will be adding more.



Are they listed on the ASX? I couldn't find the stock codes.

I note from MW's charts that we may see a pullback to the downtrend line, just a possibility, not all breakouts pullback.

Comsec has some Japan fund which started a few years ago (has done very well) but past performance is no guarantee etc etc....a recent prospectus for a similar Comsec Asian fund was pulled up by ASIC for some sort of major problem, I saw corrective ads in the papers and all that. I'm always cautious when the crowd (that's us) gets wind of this type of thing.....


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## nizar (14 May 2006)

*Re: Japan Reawakens- The End of the Beginning?*

Rich those are unlisted managed funds

Another one to have a look at is: Invesco Asian Shares Fund (~70% japan)

Also unlisted, returned 50% last year, the guy picked some real winners, seems to have good talent..


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## x2rider (14 May 2006)

*Re: Japan Reawakens- The End of the Beginning?*

Hi Nizar 
 Can you leverage into those funds ?
 Cheers Martin


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## Riles (30 May 2006)

*Re: Japan Reawakens- The End of the Beginning?*

I have Platinum Asia fund, Aberdeen Asian Opportunities, Challenger China Share fund and Platinum Japan fund - so I'm heavily overweight Asia.

They've taken a bit of a battering lately, as has the Nikkei.
Any thoughts about this? Is this a correction or worse?


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## Sean K (30 May 2006)

*Re: Japan Reawakens- The End of the Beginning?*

Just a correction Riles.

Chindiapan will drag all the Asian economies along for a while.

Birdflu is a risk to the downside.


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## YOUNG_TRADER (30 May 2006)

*Re: Japan Reawakens- The End of the Beginning?*



			
				kennas said:
			
		

> Just a correction Riles.
> 
> Chindiapan will drag all the Asian economies along for a while.
> 
> Birdflu is a risk to the downside.





Chindiapan, very witty! I like it   
I used to just say Chindia and Japan


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## mit (30 May 2006)

*Re: Japan Reawakens- The End of the Beginning?*



			
				YOUNG_TRADER said:
			
		

> Chindiapan, very witty! I like it
> I used to just say Chindia and Japan




If Taiwan starts to pick up do we call it Chindiapaniwan TaiChIndiapan

MIT


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## RichKid (30 May 2006)

*Re: Japan Reawakens- The End of the Beginning?*



			
				mit said:
			
		

> If Taiwan starts to pick up do we call it Chindiapaniwan TaiChIndiapan
> 
> MIT




lol....to make a long story short let's just call it 'Asia'. But not as funny...


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## nizar (8 June 2006)

*Re: Japan Reawakens- The End of the Beginning?*

OH MY GOD

Nikkei down 500 points  :swear:


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## RichKid (8 June 2006)

*Re: Japan Reawakens- The End of the Beginning?*

To those who hold ASX listed funds exposed to Japan- do they track the Nikkei in terms of sp? If so  how are they holding up?


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## Sean K (9 June 2006)

Platinum Japan is going ok. I bought $25K of it in Oct 05, it went to $32K in April 06 and is now at $29K. I expect this to go very well over the next couple of years. Time to buy some more maybe.


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## RichKid (9 June 2006)

kennas said:
			
		

> Platinum Japan is going ok. I bought $25K of it in Oct 05, it went to $32K in April 06 and is now at $29K. I expect this to go very well over the next couple of years. Time to buy some more maybe.




Glad you're doing well kennas, I was looking at getting into it but it's not listed, apparently you can get into it via Wrap accounts and master trusts. I'll post more in the Platinum Managed Funds thread.

So, any other Listed Japan/Nikkei exposed fund holders out there? I'll see what I can find. I thought of BJT but it's Japanese property rather than stocks/Nikkei.

The other option for long term Nikkei exposure is to get into a Japan Index Fund of some sort, there should be local products in Australia....


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## Sean K (9 June 2006)

I'm looking at BJT too. Fat Prophets rate it highly. Hold from Aegis with price target $1.86. Looks pretty solid.


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## RichKid (9 June 2006)

kennas said:
			
		

> I'm looking at BJT too. Fat Prophets rate it highly. Hold from Aegis with price target $1.86. Looks pretty solid.




There has been some selling recently so prices are temporarily capped. Stalking it atm, posted some comments in the BJT thread, GreatPig got on it early, lucky guy.

The ASX has some info on ETF's, there's a Japan focused ETF listed in the US which we can buy through ASX world link (or any international broker).


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## noirua (13 June 2006)

Japan does look to be in an upward trend that may well last very many years, perhaps 20 years; That may seem a long time, as long as the bear market before it. 

http://www.aireview.com.au/index.php?act=view&catid=8&id=3981&setSub=1


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## noirua (13 June 2006)

noirua said:
			
		

> Japan does look to be in an upward trend that may well last very many years, perhaps 20 years; That may seem a long time, as long as the bear market before it.
> 
> http://www.aireview.com.au/index.php?act=view&catid=8&id=3981&setSub=1




My favourite Investment Trust is: Atlantis Japan Growth Fund Ltd., which is based in the Channel Islands.
http://www.trustnet.com/it/funds/?fund=53685#top


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## Riles (13 June 2006)

*Re: Japan Reawakens- The End of the Beginning?*



			
				Riles said:
			
		

> I have Platinum Asia fund, Aberdeen Asian Opportunities, Challenger China Share fund and Platinum Japan fund - so I'm heavily overweight Asia.
> 
> They've taken a bit of a battering lately, as has the Nikkei.
> Any thoughts about this? Is this a correction or worse?




Nikkei down another 614 points today. Things are looking pretty grim at the moment for whatever reason. I wouldn't be buying in just yet. Seriously considering switching over to cash for a while to stop the bleeding.


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## noirua (13 June 2006)

*Re: Japan Reawakens- The End of the Beginning?*



			
				Riles said:
			
		

> Nikkei down another 614 points today. Things are looking pretty grim at the moment for whatever reason. I wouldn't be buying in just yet. Seriously considering switching over to cash for a while to stop the bleeding.




Most everything is still looking good for Japan as falls in commodities will give them a boost. Just because the market is looking cheaper does not mean shares will not go a lot lower, time to buy-in gradually over the next 3 months, imho.


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## Sean K (14 June 2006)

Now's not the time to sell. That was on May 9. Don't fall for the old buy high sell low theory. This correction will not last. Once interest rates are decided one way or the other there will be more certainty and stability. I hope. It's the unknown that is sending markets panicking now.


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## Riles (14 June 2006)

kennas said:
			
		

> Now's not the time to sell..




I've been telling myself that over and over the last few weeks. I can only stand so much pain though. Waiting and holding for a turnaround whilst burning up thousands a day! sheesh, this is getting depressing.


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## noirua (14 June 2006)

Riles said:
			
		

> I've been telling myself that over and over the last few weeks. I can only stand so much pain though. Waiting and holding for a turnaround whilst burning up thousands a day! sheesh, this is getting depressing.




No worries, or rather, don't worry. Japan has spooked over rising inflation concerns and higher interest rates that would cause a slow down. Lower commodity prices and lower oil prices will eventually cause lower inflation and with it lower interest rates.


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## noirua (2 March 2007)

Time to look at Japan. Inflation remains near zero and annual consumer spending is up 4.1%.


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## petervan (2 March 2007)

The consumer spending figures seemed to have put a smile on investors faces.


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## drillinto (29 April 2007)

"The next Asia"

Comment by Stephen Roach, Chief Economist, Morgan Stanley, New York
16 April 2007

http://www.morganstanley.com/views/gef/archive/2007/20070416-Mon.html#anchor4755


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## noirua (4 August 2007)

I'm starting to get interested in Japan after prices of stocks have been cheapened by the very weak Yen. Now may not be quite the right time to move but may be very close.


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## Uncle Festivus (13 August 2007)

noirua said:


> I'm starting to get interested in Japan after prices of stocks have been cheapened by the very weak Yen. Now may not be quite the right time to move but may be very close.




Japan is toast as well - back to deflation on a massive scale. 
The continuation of the end more like it?


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## noirua (13 August 2007)

Uncle Festivus said:


> Japan is toast as well - back to deflation on a massive scale.
> The continuation of the end more like it?




The Japanese Yen weakness has destroyed the party in Japan after 25 years of decline. I saw a report all those years ago that said " Japan will take 50 years to recover to its former high, when the main stock index reached 38,000".

My own thinking is that the Japanese Yen may well start to recover and interest rates of around 0.5% may well move upwards.


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## MR. (31 January 2008)

Japan Reawakens right before it falls back to sleep.

On the 19th of October 1987 Japanese stocks (Nikkei 225) crashed 15% from 25747 down to 21910.
That was horrific. Hangon, the market just closed at 13592. Its the third biggest economy. What!

Doesn't Japan have a less leveraged public?
If the Japanese stop sending their money to be invested overseas due to overseas falling interest rates and share markets.  Might this money end up back in the Japanese share market? I wouldn't think that it would end up in their banks at less than 1 percent.

The recent rise to 18000 was mostly I believe due to foreigners like myself.

I am not currently invested in Japan.

Does anyone have any comments?


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## josjes (31 January 2008)

I am keeping a close eye on this market. This is a contrarian play. 
Interestingly Marc Faber recently put on his watch list Japanese Small Cap ETF. He notes that Japan has fallen out of favour with investors despite the low valuations, compared to Japanese bond yields. He says wait for the market to correct another 10% to buy.


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## Sean K (1 February 2008)

josjes said:


> I am keeping a close eye on this market. This is a contrarian play.
> Interestingly Marc Faber recently put on his watch list Japanese Small Cap ETF. He notes that Japan has fallen out of favour with investors despite the low valuations, compared to Japanese bond yields. He says wait for the market to correct another 10% to buy.



I bought into the Platinum Japan Fund a few years ago. Woof.  I'm out waiting for the 'real' bottom of their market too. Or, maybe the 6.5% in my savings account is better.


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## ithatheekret (1 February 2008)

Hi Kennas , 

I've been on your blog a few times , the snakeoil got me . Still getting through Waynes mega sessions 

But I was stunned to see you have been to Ecuador and the Galapagos Islands . Do you have more photos of your travels ? I've travelled but never like you have , it's more the exotic of the exotics , where you've been .

I think your'e a bloomin' hero for diving with eagle rays , they're whities favourite food here , seals are second choice .........

But you certainly know how to live the lifestyle of freedom .

Let us know if you have more to view please , I'm envious .

PS.. I'm not impressed with Japan at all , I think they've stuffed a up yet again , but they'll print their way around it again .


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## Sean K (1 February 2008)

ithatheekret said:


> Hi Kennas ,
> 
> I've been on your blog a few times , the snakeoil got me . Still getting through Waynes mega sessions
> 
> ...



Yes, there are plenty of sharks about but not many white pointers for some reason. Mostly hammerheads and they're friendly sharks. A tourist was nibbled on a few months ago, but didn't taste very good. Only partly my choice to be here, just following the wife with her job really. I'll keep adding to the blog when I have news. Cheers. 

In regard to Japan, I've found most Fundies ramping Japan over the past 2 years as a great turn around story. Perception seems to be that they'll follow the US into recession, again, if they're not there already. It's going to take some time for the dust to settle on all this I think....


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## ithatheekret (1 February 2008)

Yes I thoroughly agree , it will take years just to collate the losses properly , many have the ability to hold a capital loss for some period before reporting it , much like the capital loss ruling here , you can hold it back for 4 years .

I'd give em' five years to get through all the paper work , then the SEC etc....


Looking forward to seeing more on your site , the missus even got out of bed to have a look  , beautiful ..... is it cheap too ?


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## MR. (1 February 2008)

Thanks for your opinions. Will give it more thought.

Made some money with Platinum Japan Fund and sold, waited a year as it  stalled, bought back in and lost it all again. Hmmm.... Should have kept to my instincts which were: Wouldn't the Japanese take sometime to build their confidence of going back into their stock market after 17 years of decline. The 2005/2006 spike was mostly from foreigners. ...

But I listened to Platinum who are “Still finding companies that they want to buy” Although the market has just rocketed from foreigners.

The latest from 31/12/07 “Japan should outperform in down markets”   as I read between the lines, yes,  perhaps a 20% fall is better than a 40% fall for other markets! 

But in all fairness I didn't give Platinum their 5-7 years. 
Look after your own money.

I'm keeping with my instinct that we are entering a “Bear market” world wide.


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## Sean K (1 February 2008)

MR. said:


> The latest from 31/12/07 “Japan should outperform in down markets”   as I read between the lines, yes,  perhaps a 20% fall is better than a 40% fall for other markets!
> 
> But in all fairness I didn't give Platinum their 5-7 years.
> Look after your own money.
> ...



Yep, I didn't give them 5 years either, just 3. So, they will skyrocket over the next 2......

My instincts are with you MR obiwan. 

60% cash with some gold and a couple of specs now.


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## josjes (8 February 2008)

Several factors to think about for the re-emergence of Japan Equity:

1. US dollar index has recently finished a bullish double bottom. It touched 74.484 on 22/11/07 and a  higher low of 74.849 on 1/02/08.  During the past week, the U.S. dollar index has rallied to where it briefly moved above 77.
Japanese housewives soon, if not finally abandoning their careers as currency speculators and will return to invest in their own share market.  
2. Japan is one of the few developed country in the world that will not suffer from collapse of housing bubble over the next few years. 
3. Japan equity valuation is at the lowest since 2003. 
4. Hedge fund reallocations from Asian emerging markets to Japan (this assuming that emerging markets will substantially underperform in the next few months)


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## exgeo (9 February 2008)

I think the only way to get value out of Japan is via real-estate. Land and property values have been falling for 15 years- until last year when they finally rose a bit. GJT is currently offering an 8c div on a sp of 70c (up from 7.2c last year), so more than 10% yield. Babcock & Brown Japan is another one. In general when rents come up for renewal, they are increased. RE market is tight, partly due to nobody wanting to build something to sell into a falling market I would suppose (no speculative building) and partly due to an 80% collapse in housing starts in the last 12 months. Presumably if you can't build something new, you have to rent an existing property?

http://business.timesonline.co.uk/t.../construction_and_property/article2781022.ece

By the way, I have lived in Tokyo since 2004 and have chatted to someone from B&B Japan (BJT) who I met at the pub and also know people who have bought and sold houses in the last couple of years and done pretty well out of it.

Japanese companies are trading below book value in some cases. Yes some of them are, but how are you going to realise that value? A takeover and breakup? Hard to do given the poison-pill strategies often employed by vulnerable companies and the web of cross-shareholdings (admittedly in the process of being unwound). Dividends from Japanese companies are low by world standards and cash just piles up in the company's bank account, one reason for the sluggish consumer demand I read in a book somewhere. Wealth created by companies is not recycled back into the economy via dividends, so consumers are unable to spend that cash, reducing domestic demand and helping to ensure deflation continues. Domestic demand is very important to the Japanese economy because exports form only about 20% of the economy (this small figure surprised me when I read it). Companies are not able to find profitable ways to invest the cash either, so it just sits in their bank account. An example of the strategies employed is the Bulldog sauce company. Takeover price offered in mid 2007 was 1700 yen or so. Current sp? 250 yen or so. Here's some background on it:

http://www.stippy.com/japan-work/bull-dog-sauce-feeds-steel-partners-poison-pill/

Doesn't make one very optimistic about the ability to realise value, even if you buy these low priced stocks.


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## MR. (27 August 2008)

exgeo said:


> I think the only way to get value out of Japan is via real-estate. Land and property values have been falling for 15 years- until last year when they finally rose a bit. GJT is currently offering an 8c div on a sp of 70c (up from 7.2c last year), so more than 10% yield. Babcock & Brown Japan is another one. In general when rents come up for renewal, they are increased. RE market is tight, partly due to nobody wanting to build something to sell into a falling market I would suppose (no speculative building) and partly due to an 80% collapse in housing starts in the last 12 months. Presumably if you can't build something new, you have to rent an existing property?




I was so close to buying RJT and GJT about a year ago.  I look them up from time to time and can not believe how bad they have gone.

Say RJT Rubicon Japan Trust.  I was waiting at one stage for when it went back to $1- it is $0.059 now.  Debts.....  You get a leveraged return but you can't get much worse than this. (I'm sure this was not part of the plan!)  The debts concerned me at the time but I'm not sure why I didn't buy when it went below the dollar.  I hope you survived!

What's wrong with buying property with a capital raising with no debt?  I guess its just greed.......

At one stage I looked at buying Japanese housing directly but the prices scared me off and involved too many eggs in the one basket.

Noticed some directors today bought some GJT


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## MR. (23 January 2009)

MR. said:


> But I listened to Platinum who are “Still finding companies that they want to buy” Although the market has just rocketed from foreigners.
> 
> The latest from 31/12/07 “Japan should outperform in down markets”   as I read between the lines, yes,  perhaps a 20% fall is better than a 40% fall for other markets!
> 
> ...




Just 5 posts above, and a year ago,  I wrote the above regarding Japan and the Platinum Japan Fund.


Did a little more reading because a few are talking about Japan and I noticed something of interest from the latest 31/12/08 Platinum's Japan Fund 1/4 report.  
"Japanese equities finally started to solidly outperform global equities - 29% decline in the MSCI Japan Index versus a 42% decline in the MSCI World Index"

http://www.platinum.com.au/arc-pjf.htm

huh...... Dam, Japan has done 9% worse than I thought.

With the strength in the Yen vs Aud over the period, in Aud terms, nothing gained nothing lost.  The Japan Platinum Fund sits as it did a year ago. If I could pick it anyone could.  I guess Kerr Neilson and co saw this coming as well lucky the Yen became as strong as it has! Their International fund sits also as it did a year ago. interesting! Guess the currency has some to do with this again?


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