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Japanese stocks hit their highest levels in three decades this past week ensuring that Warren Buffett, who made a big bet on Japanese shares in September, is right again. The
Nikkei 225 rose 714 points, or 2.7%, and briefly touched 27,601 on Tuesday, the highest since 1990. The Nikkei famously topped out at 38,957 in December 1989.
Japan has had a relatively low Covid-19 caseload, and the Nikkei has ridden the global market rally driven by stimulus. President Trump signed a $900 billion relief bill, and South Korea President Moon Jae-in confirmed a third round of direct payments of about $8.5 billion. Both markets are key for the Nikkei, whose stocks on average get 13% of revenues from the U.S. and 2.8% from Korea.
DocuSign (DOCU). And as of the end of September, 35 constituents of the Nasdaq 100 would have previously been members of the Next Gen index. That means the Next Gen index should offer investors the opportunity to own such names earlier in their growth cycle at a cheaper valuation.
“We found a lot of parallels in the companies in these two indexes,” said Ryan McCormack, QQQ strategist at
Invesco (IVR). “They are committed to innovation and striving to stay ahead of the curve through heavy spending on research and development and reinvesting in their businesses.”
There are some notable differences between the two indexes besides the constituents’ stock-market value, however. To start with, the Nasdaq Next Gen 100 Index is much less concentrated and top heavy than the Nasdaq 100. The top 10 constituents only account for 21% of the index as of September 30, 2020, much less than the 58% in Nasdaq 100.