Byron Wien Reiterates - Japan to Outperform in 2010

Byron Wien, of Blackstone Advisory Services was on Wall St. Journal Report with Maria Bartiromo, this weekend.

Wien reiterated some of his 10 unexpected events. He thinks rates are going up this year, both discount and the Fed rate. As a result he expects the American stock market to experience little or no gains.

Wien expects the Japanese stock market to outperform. Wien said, “Japan's exports were up 13.7% in the 4th quarter”. If Japan grows 1% in real terms, which it did in the 4th quarter, Wien expects a stock rally. “Since the Japanese market is at a 12 year low it wouldn’t take much to trigger a rally.”

One way to play a Japanese rally is through a Japanese mutual fund, available here in the U.S. After doing some research at Morningstar I’ve come up with 2 of the best, no load funds. The one I prefer is the 4 star rated, (SPXJX), Hennessy Select SPARX Japan Fd. The fund is up 1.3% year to date. It’s a concentrated fund, with only 28 stocks. It holds mostly large cap stocks.

The 5 star, DFA Japanese Small Company fund, (DFJSX), is a bolder pick. With 1,309 stocks in the portfolio and only a 5% turnover, there would most likely need to be a broad based small cap rally in Japan, for it to outperform other Japan funds.