written by reader Shorting Japan

By Anonymous Questions, March 4, 2014

Does anyone have a recommendation for shorting japan?

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condolawyer
Irregular
condolawyer
March 6, 2014 11:12 am

I heard that buying options to short AFLAC out of the money will do well when the Japanese bug finally finds a windshield to splatter against. I invested in a January 2015 put @ $25….AFLAC is known for the duck but they are kind of a big deal in japan, like the T-Shirt says…do ur own due diligence…

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Beervester
Guest
March 6, 2014 7:35 pm

Shorting Japan sure looks good on paper. Their companies are overvalued and their currency is bound to plunge going forward as they become more and more clearly insolvent.

However, I think that’s a dangerous game just now because of a huge inflow of new funds coming to their stocks in the coming months. It looks like the GPIF (government pension fund) is trying to move money out of JGB’s and their hopelessly low yields and into stocks and REITS. You can pretty much bet that the bigger companies will get irrational levels of support for the next while. IMHO Abenomics’ “success” in the last year was primarily predicated on that move from JGBs into stocks and enhanced by people’s added interest in stocks. In addition, there’s now a NISA scheme where households can invest 1Myen (10,000USD) into mutual funds or stocks tax-free for 5 years. Most people seem to be choosing REITS or Nikkei-based funds. Again, I expect regular Japanese people to be attracted by this plan and to shift savings from cash into NISA over the course of the year and possibly even MORE next year when reports of early-adopters success filters through to more of society.

OK, that was long, sorry. Main point: I expect major indices to be biased upward in Japan for 2014-15 couple with a drop in JPY value.

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davidshelton
Member
March 8, 2014 12:09 pm

I have liked shorting the Yen against a basket of currencies via FXY. FXY LEAPS? Anyone know what the what the weightings are in this ETF? Lately I prefer buying USD.YEN straight forex preferring to be nimble. Currently waiting on the sidelines. I was watching NZD.JPY as the fundamentals were compelling but opted for USD.JPY instead. I’m reluctant to play this one at the moment because of the markets looking toppy and Ukraine turmoil. The Yen still outperforms in times of crisis which I assume is mostly from carry trade unwinding(someone more enlightened and connected can maybe confirm this?).
Here’s one ETF that looks interesting in my Japan short research : GYEN AdvisorShares Gartman Gold/Yen ETF. I’d probably rather just buy USD.JPY and GLD to offset the USD portion.
I really like listening to Kyle Bass every time he talks about Japan!
Any other ideas out there in Gumshoe world?

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Dr. C
Member
May 9, 2016 5:41 pm
Reply to  davidshelton

Talk about a bait and switch – this guy Tres Knippa does a video from Japan with JR and writes a hot recommendation for GYEN – “buy gold in terms of Japanese yen” – very, very positive recommendation – then today, “we recommend selling GYEN” – just try to find this guy TK – the new 18 yr trading pit whiz kid analyst – did we hear from him, of course not, just Amoss – the author of TUR – let me hear where KT is – I want his opinion on the trip with Rickards getting kicked out of the Japanese park doing a video – please – somebody tell me what’s going on . . . !!!

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