Claus Vistesen

The Performance of Japanese Companies: A Growing Connection with External Demand

Hi guys,

Thanks for the comments.

On this MadHedge ...

"During my career, I watched GDP growth rates fall from a white hot 10% in the sixties, to 4% in the seventies and eighties, to 1% in the nineties and the early 21st century. Are we flat lining at 0% in the teens? That leaves fertile ground only for stock pickers who are willing to do the local spade work to find one hit wonders like Toyota and Fast Retail."

I wholeheartedly agree and really what we need to think about is the macroeconomic dynamics that will emerge if we get to situation in which trend growth is negative. As you note, buying the market is NOT the right thing to do which makes you wonder. How much to standard run of the mill models suggest to invest in Japan if you want to buy global beta? And what will happen once we tweak this model to allot a share to Japan of 0%?

@dw57:

Your intuition on China is right in my opinion which is also why everybody who hails the coming of China and an appreciating RMB should think long and hard about the demographic projections of China. I have seen a lot of both sell/buy side analysts make the connection between Japan and China lately ... so the discourse IS emerging.

Claus

Daniel Gross on Mellowing Japan

Hi Guys,

"They put a lot of effort into creating human like robots. I think they want to solve their problems with robots, not immigrants."

Yes Tom, this is very interesting. I mean, this narrative started a couple of years ago as a joke but has now emerged as a real alternative. In principle I can see it work, but only in a very strange world. I mean, it is all well and good to have robots caring for the elderly, but in terms of social cohesion it is difficult to imagine I think. That of course will depend on the nature of the robots.

@Mad Hedge Fund

I completely agree with your analysis on the US and even though I am still undecided on the course I believe the US will take I am quite confident that she will rebound faster than Japan did (or didn't). However, I still believe deleveraging to be a fact for the future and specifally that the US will become less of a provider of excess demand to the global system than before.

Jeez, imagine the US running and aggregate surplus on the external books. THAT would constitute a serious drainage of global demand.

Claus

Head Start on Japanese Elections: What About the Economy?

Basically, it is all likely to be rearranging deck chairs on the Titanic. However I do think that a change in discourse on the fertility issue would be a most welcome change ... yet, this is very unlikely in the current situation.

Thanks for the visualization of the problem through Toyota and this, mind you, is supposed to be one of the best companies they have.

Nobody wants to be a perpetual prophet of doom, but Japan is in a bind and unless people and her politicians wake up to why this is; well ... then it is going to be a lot of the same.

Claus

Head Start on Japanese Elections: What About the Economy?

Hi,

Thanks for your comment on my articles.

"Whoever wins, there's not much they can do about it."

Well, if this isn't comment of the week I don't know. I completely agree; it is all very depressing this.