Just a brief word on the whole Japan situation

I mentioned a talk by Tim McElvaine a few weeks ago, which is even more worth taking a look at now.  Of note now though is that he talks about 2 Japanese stocks, Makita (which has an ADR) and Monex.  Well, it just so happens that there's lots of uncertainty in the Japanese market now.

Here is a link to the pdf of the presentation he gives, which contains slides on his thesis for both the companies.  He provides an ABBA analysis, his approach which I briefly mentioned back in January.  The first A stands for "accident" which has certainly happened at a macro level in Japan.  His picks are interesting in that they are great or above average companies.  I would highlight that because many people talk about how there are tons of net-net and low PE stocks in Japan that have gotten even cheaper in the aftermath of the earthquake.  Prior to the earthquake there was the debate if these cheap stocks would ever increase in value.  While they've now gotten even cheaper, you don't need to worry about that debate with a company like Makita or Monex.  They're simply great franchises trading at modest prices.

One thing that is important to keep in mind with investing is that the cumulative dividends of researching stocks, even when they aren't cheap, can really be reaped in times like these.  Looking back at McElvaine's picks, he has already articulated a solid thesis on the stocks.  In the aftermath of a "black swan" event, he doesn't need to spend a lot of time researching historical finances or management's background.  He just needs to look and see if the long term prospects of the company have been harmed and then buy more.  I always try to follow companies after I've done some initial research on them, because you really never know when some unexpected event happens and drives down the price.  I'm just using this as an example of a tangible event that supports a more abstract investing principle - an ontological-esque argument about investing.  Pascal's wager applied to stocks in a way.  You really have nothing to lose by reading that 10-K and while the reward might not be infinite, a low hanging 2 or 3 bagger could await you in the future.

This seems like a level headed perspective on the situation at the reactor:

Despite this, the 40-year-old Fukushima Daiichi nuclear power plant, built to withstand a 7.9 magnitude quake, stood up to a seismic event that shook it over 30 times more powerfully than it was designed to survive. It held up to the onslaught, and shut down automatically as the tremors began.
It appears that the 10-metre tsunami that followed is what brought the reactors to the brink of meltdown, as back-up diesel generators for the facility's coolant pumps failed, and the cores began to heat up. Attempts to cool the cores were unsuccessful, and containment buildings blew up as the pressure built.
When a 20 km exclusion zone was declared – a standard emergency protocol – the global news coverage frothed with “NUCLEAR CATASTROPHE”, “ATOMIC CRISIS” and “MELTDOWN ALERT”. And how did they deal with the 9.0 magnitude quake? “TSUNAMI CARNAGE” and “NATURE'S TERROR”.

The key point you can take away form this article is that once the dust settles and panels and commissions do their thing, it might be reasonable to expect the nuclear industry to mimic Wayne and Garth: