IT'S BEEN WIDELY

reported over the past year that Japanese financial institutions were comparatively less exposed to the U.S. mortgage market than those here in the U.S. or Europe. It's worth noting that, like many other Japanese stocks, the island nation's banks have been quietly outperforming those here in the States and even Europe. I've rounded out my

Japanese exposure

with a few financial institutions whose encouraging price action defies the virtual collapse seen within the industry. Even for the proverbial "

long haul

", the best bank stocks to look at right now for my money are Japanese.

Mizuho Financial Group is the second largest financial company in Japan and the ninth largest in the world. It serves over 26 million Japanese households, international corporations and investment clients. The stock, actively traded on the NYSE, is actually up about 12% year-to-date. Also on the NYSE worth looking at is Mitsubishi UFJ Financial Group, a large international banking concern whose shares are up 10% year-to-date. Neither is included in the popular Financial Select Sector SPDR ETF. (Note, my hedge fund owns both of these stocks.)

Knowing my recent interest in off-the-radar screen names, I've also dug through the dustbins at adr.com to unearth some lesser followed picks that are traded over-the-counter. As a rule, most people simply will not consider stocks that trade on the over-the-counter bulletin board (OTC). The lack of transparency, especially trade reporting, is a big negative, even if many investors end up buying mutual funds that own these securities anyway.

OTC: , which have risen over 300% over the past two years as the market has continued to reflect the growing popularity of the company's Wii game console.

Game On

Nintendo ADRs (NTDOY): 4 year chart

Source: BigCharts.com

The risk with trading over the counter is liquidity risk. And while I admit transaction costs are usually higher for OTC stocks, when you play for the big moves, an extra percent or two haircut is more than worth it. That being said, limit orders and a reasonable position size is a must.

A Promise Is a Promise

PMSEY vs. BAC and XLF: YTD

Source: BigCharts.com

Promise CompanyOTC: which I hold in my hedge fund, is an aggressive consumer financial company in Japan that was established in 1962 and boasts over 1,400 branches and 120,000 ATMs. Shares have been cut in half since 2006, but have been steadily climbing since last fall, even as similar companies in the States have cratered. I'm also looking into Bank of Yokohama, a leading regional bank with a focus on the domestic Japanese market.

Energy's 7th Inning

The attraction with most wagers is that they play out rather quickly. So as the contenders lined up in the gate at Saturday's Belmont Stakes, bettors furiously put their money on the line in literally hundreds of combinations. Two minutes and twenty nine seconds later it was over with Big Brown, the crowd

favorite

, coming in dead last.

The stock market usually isn't so quick and accommodating. Bull moves don't unfold over minutes, but instead months, with frequent periods of consolidation and retrenchment throughout. Just consider all the various news pegs that have been used to explain away rising energy costs over the years, from the California Energy Crisis (circa 2001) to the war in Iraq (2003), the blow up at Amaranth Advisors (2006) and the declining dollar (2007).

The media coverage of oil's ascent would make you believe it shot from $50 to $130 overnight. It's actually part of a larger trend that has been unfolding for the better part of seven years. We can objectively demonstrate that it's not over yet, as evidenced by still record highs for energy last week.

Energy Plays

U.S. Oil Fund

AMEX:

U.S. Natural Gas Fund

AMEX

U.S. Gasoline Fund

AMEX:

U.S. Heating Oil Fund

AMEX:

The herd-watching contrarians will note that the story is undeniable front-page news...almost every day, with wide coverage on network news, The Drudge Report and probably your hometown church bulletin. And while I'm not of the mind to pick a top when markets are rallying it's worth noting that those types of colloquial indicators are usually present towards the end of a move rather than a beginning.

A Lousy Business "Opportunity"

Reuters reports that: "[Hugo] Chavez urged businesses to invest in joint projects with his socialist government. 'We want private capital to invest in Venezuela,' he insisted, calling for an 'alliance between the state and the private sector.'"

Invest in a socialist dictatorship that has stolen private property, silenced the independent media, intimidated political opposition and completely wrecked a once-growing economy? It's the economic equivalent of slitting your own throat.

Also See:

• The Hunt for a Bull Market

• Three Common Trading Pitfalls to Avoid

• Ultra Short ETFs Could Be Sweet For Bond Fans

Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC. At the time of writing, Hoenig's Fund held positions in many of the securities mentioned.