How to Buy Stocks in 1983 Price
Let me ask you a question. Do you remember how good 1983? This is a fun year. Ronald Reagan was president, the United States was trapped by Chicago's Tylenol poisoning, the Vietnam Monument opened, the unemployment rate reached 10%. Whether you believe it or not, Dow Jones Industrial Average closed trading was more than 1,000.
So why did I ask you something 25 years ago?
First, let me ask you another question. If you could buy the stock at the price of 1983, would you?
I asked these crazy questions, since today the level of the Japanese stock market is now seen in 1983. Can you believe it? All the focus is on the US market. Our current trading level recently appeared in 5 years or so.
Nothing is more visible than the Japanese.
Why does the Japanese market trade on these crazy levels?
I can only blame one thing – the global credit crisis. Now I know what you're thinking – "Too easy, everyone is blaming everything for the credit crunch.You are right.Japan's problem is not directly related to the credit crisis.Let me tell you how these problems are hurting a country
But there is another problem.
I'm sure you listen to the world. Said the tsunami – the waves that damaged the islands and the coastal cities, who do not remember the 2004 tsunami – the cause of the tsunami is usually thousands of miles of landslides or earthquakes – what we see today is Japan's financial tsunami, caused by the United States.
Most Japanese banks try to avoid the global banking crisis. They avoid real estate-backed securities that now cause problems around the world. They avoid all crazy financial structures.
But the Japanese market is slumping, which is caused by money.
Worldwide, the global economy is on the rise.
If you think there's a big difference in the way you are here, you can see a lot of money in the market.
The drop in these markets is huge. I see 50%, 60% or more of the market! That makes the weaker investors who are more economically weak
To transfer your investment dollars from one economy to another, you need to convert your currency.
That's why we see Investors flock to the dollar. Those who do not flee into the dollar will turn to another currency. The yen is now at 13-year high against the dollar.
Like most things, this is also a
With the rise of the Japanese yen, the Japanese economy is impaired, and a large part of the Japanese economy is export commodities, which means that as the currency increases, exports become more expensive. Prices have reduced the competitiveness of the global market. This has led to a decline in corporate sales and profit margins.
Japanese company profits will be greatly reduced. Smaller profits mean smaller valuations. This means that stock prices need to fall.
Now, this is not the theory of some ivory towers. Just last week, Sony's profit forecast fell by nearly 50%. Toyota has the same problem. According to one estimate, every 1 point increase in the yen will result in a loss of approximately $ 410 million in operating profit.
Japan's time has gone back 27 years because of the credit crisis!
Now, do not rush out to buy the Japanese market. This could be a huge long-term problem. Despite its size, Japan does not show the economic resilience of the United States. I closely monitor the economy and the market. Future buying opportunities may manifest themselves, but now is not the time.