Japanese Equities Look Cheap, but Does that Matter?

How bad has it been for Japanese equities? Down 50% since last July and approaching 25 year low bad. However, Felix over at Portfolio.com takes the glass half full view:

The plight of Japanese shareholders is germane to anybody thinking of buying stocks today. Japan's companies are well-run, and its financial institutions, as we saw with the MUFG deal, are today more part of the solution than they are part of the problem.

Yet he does warn that cheap doesn't necessarily equal opportunity.

Which is not to say that Japanese stocks are a screaming buy right now, but which is to say that if you think that stocks in the US are cheap, maybe you could look across the Pacific and find some equally-attractive assets which are even cheaper. Or, to put it another way, the lesson of Japan is that even cheap stocks can continue to decline for decades.