I own some of those. Since I started investing in Japan I've hardly ever lost money but many times I haven't made much either. The currency moved against me a little but the main problem is that these companies simply aren't run for the shareholders. A lot of times even if the business is decent they'll sit on cash for years on end earning like 4% on equity. Their business culture is very different. I forgot where I read it but someone was describing how they bought out a sake brewer. The guy's family had been doing it for like 500 years or something crazy and then he sold out. Apparently that was a very unorthodox decision and he was going to be seen as a failure for abandoning the family business. Price paid, returns on other prospective investments, etc. didn't figure into it. It kind of reminds me of how people view farm land where i grew up.
One thing I think might be smart, if you think there's a decent chance there's some sort of mass awakening of all these zombie companies, is to look for the ones that hold a lot of securities. That way you'd get a double re-rate. But to me it's a big if if this even happens. It would be interesting to hear from people who are over there what the feeling is.
