Here's What's Scary About American Investors Pouring Cash Into Japan

barron's Japan

This weekend’s Barron’s tells investors to BUY JAPAN NOW.

Josh Brown at The Reformed Broker was ahead of the curve on this trade, having bought Japanese small-cap ETFs last week while everyone was losing their heads and flipping out.

Already that move has been a winner.

What’s really interesting is this: Although the Nikkei has been crushed since the earthquake, investors have pumped record amounts of money into Japanese ETFs and equity mutual funds.

What we take from this news is: Investors remain of the mindset that every dip — even something as epic as an earthquake, and possible existential crisis (the nuke plant) — is a buying opportunity.

Even before the market opened on the Monday after the earthquake, we saw people talking about the earthquake as a chance to buy (those who bought in right away of course got their clocks cleaned).

This is consistent with the strike against Black Swans that has been in existence for a while now. Investors just don’t buy that anything can really go bad. And while this is incredibly bullish for now. The market still clearly wants to rise, it would seem to raise the prospect of a huge air pocket if things go wrong.

Click here for a guide to the economic impacts of the Japan earthquake >

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