Beware of Japanese Brokerage House Stocks

If you share our concerns about Japan's market, then why stick with the brokers?

Recently we got a peek of the future for Japan's traditional, big brokers: while the profits of Nomura Holdings (NMR) and Daiwa Securities (DSECY) were strong compared to last year, they plunged when compared to the the second quarter of this year. Nomura's fell 84%, and Daiwa's skidded 58% when comparing 2Q06 to 1Q06. During that quarter, the Nikkei fell by 9%.

We don't seem to be the only ones worried about Japan's Economic Time: analysts expect Nomura's earnings to fall by 15% in the year to next March.

Money-saving implication: Exit Japan's big, traditional brokers like Nomura Holdings and Daiwa Securities.

NMR-DSECY 1-yr comparison chart: