by
Stephen Northfield
Money
& Markets, Report on Business, The Globe and Mail, March 26, 1999
“Yesterday’s
contrarian position – that Japan is finally on the mend – has become
today’s middle-of-the-road consensus.”
“And
while international money managers sow madly to build up their woefully
underweight positions in Tokyo, Sid Klein has been quietly reaping.”
“Mr.
Klein, a Montreal-based financial adviser, has been a Japan watcher…for
years. After calling the turn ahead
of the crash of 1990, Mr. Klein has patiently sat on the sidelines ever
since, dismissing the Nikkei’s false starts.
His consistently bearish views have been duly noted in Barron’s, as
well as in his daily fax bulletins to clients.
Last
October, after seeing what he deemed to be a ‘1932-like low’ in the Japanese
market, he came in off the bench”
“Since
then, the Nikkei 225, the most watched benchmark of the Japanese market, has
risen a little more than 20 per cent.”
“More
importantly, Japan’s over-the-counter market, a much better barometer for the
domestic-oriented stocks that Mr. Klein is focused on, is up more than 50
per cent since the October lows.
Mr.
Klein’s advice
has been to forget the blue-chip, export-driven outfits like Sony Corp. that
carry big weight in the much-watched Nikkei 225 index. Mr. Klein’s thesis is that the gems can be found
among the charred ruins of stocks tied to the moribund Japanese economy, shares
that have been crushed since the asset bubble burst in the early 1990s.”
“The
stocks of many of these companies – like Japan Airport and Cleanup Corp. –
have surged since Mr. Klein made his call…”
“Repatriation
of Japanese investors’ vast overseas holdings has already begun, lifting the
yen along for the ride, forces that should help pull the market yet higher
still.