International Investing

This tip from the Daily Reckoning:

For the first time in years, the dividend yield on Japanese stocks (as measured by the Topix index, which is broader than the Nikkei) moved higher than the yield on government bonds. This is a very big deal.”

Now, you can get more yield from a Japanese stock than from a Japanese bond. That makes stocks a buy, says Merryn.

“Every other time this has happened it marked a rally in Japanese shares that sent prices up 30% to 40%.”

The situation in Japan, as near as we can tell, is a mess. But it is a mess in an opposite way to the mess in the United States. Americans are in trouble because they spent too much. The Japanese are in trouble because they spend too little. American markets are now falling because they strayed too far from the fundamentals. Japanese markets have already fallen because they paid too much attention to fundamentals.