Friday, March 4, 2011

Marc Faber Says Time to Buy Japan after 20-Year Lull

After 20 years of stagnant growth in the longest bear market for a country over that period of time, Marc Faber is saying it is now time to buy Japanese stocks.

Not only does Faber recommend acquiring shares of Japanese stocks, but he also says investors should hold onto their shares.

Faber's reasoning is Japan will be forced to print money in order to pay for the huge debt load they are under. They will weaken the normally reliable yen, and will help Japanese exporters, which should push up the earnings and share price of the companies.

Faber said this at the CLSA Asia-Pacific Markets’ annual conference in Tokyo, “If I had to make a bet for the next ten years in terms of equity markets, I would seriously consider a very strong weighting here in Japan. Once the debt market starts to go down, the yen will begin to weaken and that will lift equity prices. I would buy equities at the present time.”

“If I look at the next five to ten years, the interest payments on the government debt in Japan and the fiscal deficits will become very burdensome and that will necessitate monetization,” Faber added. “That will bring about a huge shift of money out of cash and bonds into equities.”

Goldman Sachs (NYSE:GS) has also become bullish on the Japanese equity market.



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