Tuesday, November 12, 2013

Happy Anniversary Japanese Bull Market

Happy Anniversary Japanese Bull Market! It's been a wonderful year! Happy Anniversary market anticipation of Japanese reflation! The market almost believes [for now] that you might succeed without destroying the entire edifice! Happy Anniversary to the official end of the "Yen is a Safe Haven" meme! Ignoring Kyle Bass, this was an absurd hiding place - even by the measure of absurd hiding places. Happy anniversary to the discovery by investors that Japanese assets were cheap beyond compare! Unfortunately, most of you didn't accumulate them when they were cheap, only to find that they were rather difficult to accumulate when many others wish to do the same. Happy Anniversary to the re-weighting of Japanese equities in Global portfolios! Hope you've been hedging the FX exposure! Happy Anniversary to Japanese HF TTM returns! They have made veritable heroes out of people previously almost-embarassed to say they had anything remotely to do with Japanese equities.  And a very very special  Happy Two-Year Anniversary wish commemorating the Olympus Corporation Surrender. Their capitulation and subsequent revelations of twenty-years and nearly $2bn of "pass-the-parcel" deceptions to hide spec trading losses, culminating in the most stupid and comedic plan to finally dispose of the hidden red ink, will be remembered as the crowning achievement of Zaitech. (See here for my long-form account that few have had the patience to read - Free beer for engaging comments!) 

Since it is more informative for Cassandras to peer in to the future, than dwell upon the past,  what next? I would be well-surprised to see index levels lower, or the yen higher, into calendar year end. In fact, if there were a comparative measure of bang-for-proverbial-buck in allocating more to existing to positions to capture the rather obvious year-end spoils dangling dangerously low, Japanese equity, expressed in all its forms, would rank rather high indeed and present some of the most compelling opportunities for monkey business.  

1 comment:

Anonymous said...

Some additional thoughts

1) The reduction on capital gains and dividend taxes expires at year-end, and they will rise from 10% to 20% in the new year. (Should I bed and breakfast, or hold? - I hate doing tax-related adjustments, but what will be the reaction of other market participants.)

2) The new year also brings the Nippon ISA (NISA): tax exemption for 5 years (with a rollover option) on Japanese share investments of ¥1 million p.a. This scheme will last for 10 years. (I am thinking of the way UK ISA accounts morphed over the years.)

3) There are still some Japanese companies selling at attractive prices; Bulldog Sauce isn't one of them!