EWJ Japan iShares (EWJ)

[mlkrborn]

IT LOOKS JAPAN FUNDS RESISTING WELL!
NOT FALLING! SHORTIES WONT BE ABLE DO KILLINGS DESPITE TERRIBLE TRAGEDY!

ETFs by Brett Arends (Author Archive);
"Bargain Hunters Snap up Japanese Shares

Investors simply must look at the price they are paying for Japanese stock market funds. What's happening in the market today has turned dangerous.

Everyone knows the Nikkei collapsed by 11% overnight.

Also See:

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* A Critical Moment for Japan's Economy
* What the Quake Means for Stocks

But Japanese equity funds trading in New York have been rallying sharply since mid-morning. Investors have been trying to buy the dips -- but it looks like they're not looking at the price.

By early afternoon, the iShares MSCI Japan Index fund ( EWJ: 10.03, -0.02, -0.19% ) trading in New York was selling for just 2% below Monday's close.

The iShares MSCI Japan Small Cap Index fund ( SCJ: 41.47, -0.85, -2.00% ) : 4.5% below.

In other words, investors aren't getting anywhere near the full "crash discount" they think they are.

According to iShares, the last reported net asset value of the EWJ fund was $10.27. But that NAV is out of date. It was calculated before Tokyo's 11% crash.

A truer figure is probably somewhere around $9.20 a share - an 11% drop from $10.27. Yet as of Tuesday afternoon, U.S. investors were buying the EWJ for $9.99 per share.

Tokyo is closed right now. Based on the closing prices from last night, these funds should be lower. Maybe Tokyo will open higher tonight -- and maybe it won't. In this environment I'd rather buy at a discount, not at a premium.

Since last Thursday, Japan's TOPIX small cap index has fallen 22%. The SCJ fund: Just 14%.

What about the closed-end funds? It's a similar story. The Japan Equity fund ( JEQ: 5.83, -0.05, -0.85% ) is down just 2.6%, the Japan Smaller Capitalization fund ( JOF: 8.37, -0.06, -0.71% ) about 2%.

If you want to buy Tokyo at a discount, check the price on the fund to make sure you are actually buying it at a discount. Be aware, too, that although this crash may offer a buying opportunity, it comes with a good dose of risk.

Remember BP ( BP: 43.77, -1.30, -2.88% ) when disaster struck in the Gulf last spring. The stock looked pretty cheap after it had fallen to $50. But as events spun out of control it fell all the way to $27 before finding a floor. Someone who bet too many chips too early was on the wrong side all the way down -- and missed out on the best deals of all. (I was among those who saw opportunities too early.)

In Japan things may get cheaper -- maybe even a lot cheaper -- before it's over. Tread very carefully. Only buy in small doses at a time. And for heaven's sake watch the price.

Read more: Bargain Hunters Snap up Japanese Shares - SmartMoney.com http://www.smartmoney.com/investing/etfs/bargain-hunters-snap-up-japanese-shares-1300213875895/#ixzz1GjTWTxjs";