Readers don't need a historical recitation of how Japanese markets have disappointed investors since December 1989, and that when you think things can only get better, they get worse.
Speculation never ceases that the trend will reverse, and Shuei Abe, the chairman of alternative-investments firm Sparx Asset Management gave his viewpoint in a presentation yesterday that better times for Japan are just around the corner.
The post-1989 Nikkei 225 low in Japan occurred in October 2008, but the market continues to stagnate, closing yesterday at 9,278, and investor pessimism continues to be reflected in stock prices.
The index hit another nadir in 2009, when the Democratic Party of Japan had its Lower House win. At that time, the ratio of the MSCI Japan Index to the MSCI World Index fell below 0.5 to around 0.4, and it remains around that level.
Although Japanese monetary policy has remained tight and capex investment has been anaemic, Abe contends that this pessimism gives an attractive investment opportunity.
"We do not agree the Japanese recovery is temporary this time," he says. "Japanese companies will be prime beneficiaries of Asia's growth." He points to average corporate sales and recurring profits for fiscal year 2010, and growth figures of 6.1% and 37.5%, respectively.
"Politicians of all parties recognise that a target for Japanese growth is important," he says. To break the mould, what strategies are they promoting? Abe lists demand-side policy measures such as initiatives, green technology, medical care and tourism, and hooking into the Asian growth story.
Whether buzzy themes such as green tech, healthcare and tourism can rouse Japan from 20 years on the canvas remains to be seen, but the evidence does show that Japanese companies are making cash in Asia.
Sparx's list of Japan's top 10 companies says that 11% to 54% of their sales are made in Asia, and 34% to 250% of their operating profits are made in the region, regardless of what their profit and losses are elsewhere.
"Asia is an exciting growth factor. We share cultural similarities," says Abe. "It seems investors have given up on Japan, but will they be right or wrong?" He thinks the latter.