Winners In A Depressed Market
On August 29,
CNN reported Japan’s Nikkei 225 stock index closed below 11,000 for the first
time in 17 years. As you can see on its weekly chart below, the Japan Index has lost
nearly 45% since April 2000 and still isn’t showing any signs of recovery.
Many Japanese investors blame incompetent politicians and business executives
for an almost ten-year-long economic slump.Â
It is a truly difficult environment
for Japanese investors and traders. I was wondering what they’re buying, so I
decided to call my friend in Tokyo. Before he gave me a few stocks he has been
watching, he explained to me the best way to pick winners in the Tokyo market. He
said, “It is imperative for us to know what gaijin (foreigners) are
buying or selling. We must find out what prominent, influential foreign
financial institutions are focusing on. Let the big boys tell us what they like.
We will buy whatever they are buying.” It sure reminded me of Kevin
Haggerty’s favorite word — generals.Â
The chart below is a daily chart of Tokyu Department Store (as of the
close of 8/31/01), one of a few stocks my friend mentioned. (Note: The
blue bars indicate down days, and the red bars indicate up days. Dates
show years first. 01/04/02 means 4/2/2001.) The stock broke out to a 52-week
high on 8/24/2001 with extremely high volume. Currently, buyers are waiting for
the stock to end its pullback from the recent high.Â
Even a seriously downtrending market
has winners. Our mission is to find where the action is. That is the one
important key to survival.
Have a great Labor Day,