Several weeks ago, I had the same feeling as you on Japan. For investment purposes I decided to concentrate on Japanese 5G related companies. Ignoring the major telecom co's, I then came up with the following list of companies involved in parts related to the 5G area:

Murata, TDK, Alps, Taiyo Yuden, Anritsu, Advantest, Yoko-o, Itocho techno solutions and CTC.

After some fundamental and technical research, I decided to buy Taiyo Yuden, though I believe all of them will benefit from the coming technology revolution. When I saw 1st the 30-year chart, then the 20-year chart it reminded me of the Microsoft chart back in 2012/2013 i.e. the beginning of Satya's evolution at the company. I actually have a relative who works for Microsoft and watching the chart formation I strongly recommended at that time they hold their regular management share distribution and even buy more.

Taiyo Yuden joined the tech bubble and peaked back in 2000. Since then it has basically moved sideways until the beginning of this year. It has popped on the upside, consolidated and is now moving higher, ala Microsoft soon after the Satya era.

Plus, I know you are not a great fan of trading volume stats, but look at the monthly volume stats over the last few months, several times 150 million shares have been traded. this is unheralded, well at least for the 30 years of data I have. Meaning a whole new generation of investors have put their money into the co because of something they know. Unfortunately, I know Japan does not have the unicorns of China, the USA, India and the UK but for Japanese investors this could be one way of playing Japan's future.

Eoin Treacy's view

Thank you for this insightful email. One of the factors I believe that is attracting investors to Japan is the fact it has a such a deep pool of companies that provide invaluable components for the growth of the wider global technology sector. The fact they have been underappreciated for so long is justification for investor interest, particularly if global growth is primed for recovery.

Here is the full text of the email above: 

Several weeks ago, I had the same feeling as you on Japan. For investment purposes I decided to concentrate on Japanese 5G related companies. Ignoring the major telecom co's, I then came up with the following list of companies involved in parts related to the 5G area:

Murata, TDK, Alps, Taiyo Yuden, Anritsu, Advantest, Yoko-o, Itocho techno solutions and CTC.

After some fundamental and technical research, I decided to buy Taiyo Yuden, though I believe all of them will benefit from the coming technology revolution. When I saw 1st the 30-year chart, then the 20-year chart it reminded me of the Microsoft chart back in 2012/2013 i.e. the beginning of Satya's evolution at the company. I actually have a relative who works for Microsoft and watching the chart formation I strongly recommended at that time they hold their regular management share distribution and even buy more.

Taiyo Yuden joined the tech bubble and peaked back in 2000. Since then it has basically moved sideways until the beginning of this year. It has popped on the upside, consolidated and is now moving higher, ala Microsoft soon after the Satya era.

Plus, I know you are not a great fan of trading volume stats, but look at the monthly volume stats over the last few months, several times 150 million shares have been traded. this is unheralded, well at least for the 30 years of data I have. Meaning a whole new generation of investors have put their money into the co because of something they know. Unfortunately, I know Japan does not have the unicorns of China, the USA, India and the UK but for Japanese investors this could be one way of playing Japan's future.

Taiyo Yuden held a sequence of higher major reaction lows, within its base formation from the 2008 low until 2018 when it successfully broke above 2000. Since then it has been ranging mostly above that level in what looks like a first step above the base. A sustained move below the trend mean would be required to question that view.

As a note on volume. I think I should clarify my view. Volume indicators are not something I use but I agree when volume spikes outside of its historical norm, and holds the higher level, that can be viewed as confirmatory evidence of a new group of buyers now trading the share.