The Big Story – Is Japan’s Sun Rising Again?

Featuring Cindy Ponder- Budd, Alex Kinmont, Jesper Koll, Brian Quartarolo, Mark Newton

A record performance this year by Tokyo stocks has been largely ignored by Western Investors, after sleepwalking the past two decades. Will the stealth rally in the Nikkei continue and finally confound the skeptics, with an assault on the all time highs, or is this another false dawn for Japan?

Published on
22 November, 2017
Topic
Monetary policy, Macro, Japan
Duration
29 minutes
Asset class
Bonds/Rates/Credit, Currencies, Equities
Rating
58

Comments

  • AW

    Anak W.

    20 12 2017 02:59

    0       0

    labor argument is in conflict with each other.
    they said labor is decreasing and wages is increasing however it is still relatively low among G7 countries. Then, they said, because labor is cheap ==> labor is more attractive to oversea. [ well, it was cheaper before right? so it not suppose to be more attractive when its more expensive.] Also, labor is less, but, they said, labor is more attractive to oversea. [Well, labor is less, but almost full employment. Why would anyone want to invest if it means to increase demand of those smaller supply of labor[ wage increase, even more expensive]?

  • ML

    Michael L.

    6 12 2017 05:42

    1       0

    great soundtrack!

  • SB

    Stewart B.

    30 11 2017 21:33

    2       0

    While I think there may be some truth that Japan's economy is recovering, this analysis is completely removed from reality.

    1) Given consensus is almost unanimous that structural reform was never done, how can he say with a straight face that structural reform isn't needed, only continuing to avoid the central bank and treasury errors of the past!?

    2) Show me the demographic curve and I'll tell you the growth rate. Could anything be more empirically certain? What sort of a fool would defy history and claim that ageing demographics means growth. Once again, one more economist who has over-thought it (wishful thinking) while completely ignoring history.

    3) These people made nonsense claims! For instance, consider the claim that 25% of profits are from US exports. Challenge yourself now as to what this means. How would you measure it? Remember that profit = revenue - expense. So, let's say a company's revenue is 100 and their expenses are 98. This gives a profit of 2. Is he really saying that 25% of this profit (2 * 0.25 = 0.5) is due to exports to US. Really? This means that only 1/200th of their exports are to US. Hopefully this example highlights the nonsense of trying to assign proportions of profits to trade. If he said 25% of revenue that might be right. What a noddy.

    Sorry but I kind of agree with the idea that Japan is recovering but their analysis is bogus.

    • AW

      Anak W.

      20 12 2017 02:51

      0       1

      for the thrid part. your argument is slightly strange to me. because it sounds like you are saying that profit does not grow propotionally to revenue. It might be true, but that's still assumpion.

  • JD

    Joe D.

    30 11 2017 18:47

    0       0

    IMO, they made the case for an inflationary market in Japan, which may hurt Japanese exports, thus slowing down the corporate cash machines.

  • MT

    Mike T.

    26 11 2017 10:33

    1       0

    I find it interesting to note the strength of views in this thread, The fact remains we're here to make money, and for those that do not/did not have at least some capital invested in Japan, even if only at at 'lottery ticket levels', that was a clear unambiguous mistake!

    • DC

      D C.

      27 11 2017 19:03

      2       1

      So then your investment strategy is just to look for obliterated markets, throw caution and analysis to the wind, and hope for a hail mary? Not to say you can't make money doing that with a portfolio of those markets- akin to distress debt portfolio.

      But I think a lot of the comments here are based on gauging an investment opportunity with a decent understanding of underlying fundamentals. Taken further, most would like to see "real" growth supporting equity market gains, rather than manipulated bs from artificial sources, explaining the added outrage.

      We all want to make money, but philosophically and in the long run, most RV viewers would like to see technological innovation rewarded (long), and financial sleight of hands punished (short).

  • AE

    Alex E.

    26 11 2017 02:49

    3       0

    As Steve H. says below, the JCB has bought up nearly every JGB in sight and is the proud owner of 40% of the Japanese Equity Market and they did this with funny money. How do you trust this market? How do you trust any market skewed as badly as they are by Government Confetti? What really cooks my goose is that these shysters are likely to get away with it...and we're the ones who are going to pay for it!

  • SH

    Steve H.

    25 11 2017 19:11

    6       0

    I understand the bullish case, but was amazed none of them mentioned the fact that the Japanese central bank is buying up their stock market.

    • BK

      Brian K.

      25 11 2017 20:23

      1       0

      Yeah the CB owns over 10% of many companies.

  • IV

    Ian V.

    25 11 2017 15:55

    1       0

    At first felt it was too positive but it's useful in the end. Watching this helps me root out the extra emotional charge I've had with the dislike of the Japan economy and market. No longer disgusted by it but I still come away highly suspicious and don't see a boom as possible. All that said, I hope they're right from my own career/income/wallet standpoint.

  • B

    Bob .

    24 11 2017 21:42

    0       0

    Enjoyed it and job well done. Acceptance of woman into the job force has been key for them in helping to address their demographic challenges. The statistic about 98% college graduates getting F/T job offers within 10 days of graduation screams loudly about their demographic challenges. Japan has always had cultural challenges embracing immigration, but one has to think that more work on this will need to be done.

  • VS

    Victor S.

    24 11 2017 15:45

    1       7

    This was a fantastic commercial on buying Japan.... 27 mins on PLUSES 1.28 seconds of OF NEGATIVES? JAPAN TECHNICALLY IS BULLISH-THOUGH OVER BOUGHT ! HOWEVER THE LONG TERM FUNDAMENTALS ARE A HORROR. THE PROBLEM IS REAL VISION NOT CORRECTING THE PROPAGANDA ? WHEN ONE OF THE PRO-JAPAN TALKERS SAID JAPAN(THE COUNTRY) HAS CHEAP LABOR ( Y823 =$8.95) BUT “LA ,SEATTLE , AND CT HAS IT $15.,15,AND $10... FOR SEVERAL HIGH PROGRESSIVE STATES AND NOT $7.25 FOR THE US -IT SOUNDED LIKE NANCY PELOSI TALKING -PLEASE -DO YOU THINK WERE DUMB? I HOPE YOU GUYS GOT PAID FOR THIS CRAP? REAL VISION GET REAL!!

    • SL

      Stephen L.

      24 11 2017 17:09

      7       0

      How could it sound like Nancy Pelosi talking if he was referring to the cost of labor being too high in some US cities compared with Japan? Your use of cap locks suggest you were under emotional duress while typing. Maybe have a walk or meditate and come back.

    • AE

      Alex E.

      26 11 2017 02:58

      5       0

      Victor, why are you SHOUTING?

  • IF

    Ian F.

    23 11 2017 18:08

    2       1

    These are japanese experts? Frightening. They talk as though japan is a western style capitalist country and the same rules apply.

  • TH

    Timo H.

    23 11 2017 16:17

    5       0

    Isn't it wonderful, what a thick pile of freshly printed money can do, until it can't? It isn't over until the f(i)at lady sin(g/k)s.

  • CA

    Courage A.

    23 11 2017 08:03

    1       3

    get anton kreill !!!!!! pl3ase with a cherry ontop

    • CL

      Cameron L.

      25 11 2017 07:42

      1       0

      Realvision staff do not entertain the thought of interviewing individuals that in their own communities’ privately lambaste, chastise and label Realvision as a fear mongering marketing platform for professional investment managers to pitch their funds. Anton is the epitome of narcissism, egomania and uncontrollable arrogance. People do not need to look far to see how he treats people online and his brutal bullying marketing tactics. Viewers will not welcome it.

  • MS

    Matt S.

    23 11 2017 07:43

    4       0

    Wait, this is bullish - I want the old RV back! ;p

  • OB

    Olivier B.

    23 11 2017 04:23

    6       6

    Easy to talk bullish after the topix raised 20% in the last 9 months...why didn't RV get this piece out and made the bullish case one year ago? Reminds me of what we heard on CNBC.

    • PK

      Paul K.

      23 11 2017 05:47

      2       0

      The facts are that this wasn't a story 12 months ago. This has accelerated since Abe's approval ratings bottomed in August

    • CL

      Cameron L.

      23 11 2017 07:41

      10       0

      Alex Gurevich was on RV 12 months ago and made a strong case for Long Japan.

    • CL

      Cameron L.

      23 11 2017 07:45

      3       0

      Alex Gurevich, Interview date: 22 August, 2016, Time 16min Mark

  • SD

    Stephen D.

    23 11 2017 04:01

    2       0

    Didn't this feel too short? It's the third largest economy in the world and largely still ignored in the west. Some more depth, especially on sectors or stocks that might be a focus would have made this more useful. I liked the use of the archive snippets BTW, very useful.

  • DS

    David S.

    23 11 2017 01:00

    0       0

    When a company cash positions is really high, it probably cannot find good investments. How are dividends taxed in Japan? Is the surplus cash in yen/yuan/dollars/gold? Is it onshore or offshore? With the Bank of Japan buying so many Japanese stocks and ETFs, how do the company cash balances effect Bank of Japan and Japanese government policies? This is really complicated and dynamic. Above my pay grade, DLS

  • NT

    Naser T.

    22 11 2017 22:30

    10       1

    For anyone interested in financial history post WWII I highly recommend watching "Princes of the Yen", one of the best documentaries out there! Compliments this video immensely.
    https://www.youtube.com/watch?v=p5Ac7ap_MAY

    • DH

      Dion H.

      23 11 2017 06:39

      0       0

      Really, really nice mate. Appreciate the link to that one. Opens your eyes to the banking cartel and their disgusting operations.

    • CM

      Chris M.

      24 11 2017 04:10

      0       0

      Yes, thanks for the link. Appreciate this type of additional info.

    • AM

      Alexander M.

      25 11 2017 22:39

      1       0

      Richard Werner would be a great guest for RVTV.

  • SL

    Shanan L.

    22 11 2017 21:10

    11       1

    the BoJ buying etfs is not a genuine market signal. it is manipulation. the stock market is reflecting the expectation of continued central bank buying. they may never be able to unwind all of this safely.

    • BK

      Brian K.

      25 11 2017 20:22

      1       0

      Keep it going until you can't. Central bank owns over 10% of some companies equity. Whats the end game no one knows...

  • tW

    tgwtom W.

    22 11 2017 16:26

    15       0

    RealVision interview with Richard Koo is a good companion piece.

  • CL

    Christopher L.

    22 11 2017 15:18

    1       2

    Man, forget 300 years. In the next 30-40 (I'll only be 63), Japanese will see a demographic drop that would only rival the black plague like 5 centuries ago.

  • EK

    Emil K.

    22 11 2017 15:08

    14       0

    To paraphrase George Friedman, the geopolitical analyst, Japanese society is capable of rapid and radical transformation having successfully carried out three breathtaking metamorphoses in the past 150 years (Meiji Restoration, military expansionism, liberal democracy). Perhaps Japan has been so successful (when events FORCE a reckoning) because the nation's homogeneity and its cultural cohesion reduces frictions natural to such dramatic reorientations? History, and the views expressed in this video, suggest that not only would it be a mistake to write off Japan but also not to expect that Japan remains one of the most important countries in the world.

  • CL

    Christopher L.

    22 11 2017 15:06

    3       3

    The first guy is bat shit crazy. Not surprising considering he's from an ETF shop

  • CL

    César L.

    22 11 2017 14:39

    7       0

    Horseman Capital has published 4 new posts on their website about the current Japanese situation. I think it's worth the time to anyone that is interested in Japan

  • FA

    Frank A.

    22 11 2017 14:16

    16       0

    Not convinced. Since 1980 the NKY has risen 2.9% average annual rate while current ¥ GDP has risen only 2.1% over the same time period ( and has actually been flat since 1995). I see no compelling macro reason why that is going all of a sudden break to the upside. It's an economy of the "walking dead" dependent on a decaying Eurodollar complex. The BOJ buying stocks through ETF's is not the same as promoting "real" economic growth. Without that, it's nothing more than a casino chip being pushed around by speculators.

    • TM

      Tony10 M.

      23 11 2017 09:07

      1       0

      I agreed. Can you explain the dependence on the eurodollar?(or where I can learn about it?)
      Strike 1: Manipulated market
      Strike 2: Horrible demographics
      Strike 3: The highest debt in the world

  • DR

    De R.

    22 11 2017 13:41

    2       0

    currency implication?

  • SG

    Sheila G.

    22 11 2017 13:22

    10       0

    - It would have helped to understand the investment opportunity for 3-month, 1-year, and 3-year period. This was addressed but it could be stated more clearly across different time horizons.
    - It would have helped to understand the currency hedged vs. currency unhedged, historical vs. expected returns on the NI225.
    - Catalysts were covered quite well.
    - Trade ideas and risk/reward opportunities could have been more explicitly stated.

    • MT

      Mark T.

      23 11 2017 19:32

      0       0

      Gracias

  • Nv

    Nick v.

    22 11 2017 11:43

    11       12

    Fantastic. Well done