Japanese Bull Market: Nikkei: Earthquake

So a few questions arise about what happened in Japan after the massive earthquake as it pertains to their economy and their markets. Certainly it’s a tragedy loss of life, property, businesses, factories, possible nuclear leaks who can know the exact extent of the damage just yet. It may take months to really know. So I took a look at Chile, they had a similar devastating earthquake that rocked Valparaiso and Santiago. Like the market is selling off in Japan so did the Chilean markets.

I don’t want to sound callous but natural disasters end up being great buying opportunities. What happens is that a lot of money is spent trying to rebuild, there is an increase in demands for homes, wood, concrete, and various other building materials. The Chilean market soared after settling down and is now one of the best performing markets in the world.

So certainly you can’t assume the same thing will happen in Japan but it worth a play. I don’t think my theory about the end of the Japanese bear market will be effected by the Quake. There will be greater domestic need for goods and services, this increased activity plus my original theory of increased exports to China, India and other parts of Asia, like Malaysia, Indonesia and Vietnam should keep the bull on track. 

Ways to play this if you don’t like individual stocks is by JOF (small cap ETF), and EWJ (Large Caps) or stocks that will do well are their banks which escaped the whole financial crisis like MTU, or Motor companies like Toyota (TM), Honda (HMC), and electronics like Sony (SNE) and Panasonic (PC). 

The only way I would re-think this is if their is some sort of nuclear disaster, I pray there will not be.