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Monday, March 21, 2011

Crisis means opportunities

I'm tied up with a business trip in Europe this week and won't have much time to write. But just a quick note regarding a great potential opportunity right now. I like the way CRISIS is expressed in Chinese, which means risks but also opportunities. In the investment world, opportunities are always associated with risks.

What is the most headlined crisis at the moment in the world? No question: earthquake in Japan and the associated nuclear crisis. I already told you about the great opportunity about the nuclear power sector, especially uranium stocks. At the same time, Japan itself is a great opportunity out there. Actually prior to the earthquake, Japanese stocks were already among the cheapest ones in the world. I know the Japanese market has been dead for over 20 years but when stocks are deep in the value, they will generate profits for you. Now, the crisis brought about a huge panic sale of everything and therefore the Japanese stocks have become even more valuable. I think you can call them easy money now given how cheap they are. The easiest way to buy Japanese stocks is via EWJ, a Japanese index fund ETF. I think it would be a great buy around $10. Of course, this is not for short-term trading or speculation but for long-term investment. It is very likely it may be volatile in the near term and may drop further. But in one or two years, we may see triple digit gains if we are patient enough.

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