Contrarians' Day: It's Time to Consider Japan

For the value-oriented investor comfortable with a little added risk and a longer time horizon, it's time to invest in Japan. Seriously.

The words "it's time to invest in Japan" should never be uttered casually. In fact, a Dow Jones Interactive news search finds the phrase turned up with regularity -- in 2001, 1997, 1994 and so on. Investors who jumped haven't fared well: The average mutual fund focused on Japan lost 23.11% a year over three years and shed 3.93% over five years, placing Japan funds among the bottom three among all fund categories, according to Lipper, a Reuters company. Despite glimmers of hope like 1999's stock market moon shot, the world's No. 2 economy remained mired in a 12-year slump. Talk about contrarian plays.

Yes, Japan's government still has to go beyond half-measures in righting the economy. And yes, many titans of Japan Inc. still move too slowly to turn themselves around. And yes, a lot of people -- including Japan's savings-rich denizens -- remain deathly afraid of investing in Japan. But with stock prices recently hitting 20-year lows, if even a fledgling, slow-growth recovery takes root, the Japanese stock market looks dirt cheap. ...