Valuation + Monetary Policy = Bullish Stance On Japanese Equities [View article]
Timothy, Thanks for the comment. I agree, of course, that if it the performance quartiles were linear it would have been preferable. If you just broke the analysis into the two buckets of the high and low dividend years as we also discussed, the high dividend years had an average return of 11.94% while the low dividend years had an average return of 6.12%. I still see that as a meaningful differential in just the simple 2 bucket “High/Low” analysis. But we showed the quartile analysis because I thought the extreme ends of the valuation ranges – times it was the bottom quartile dividend yield or top quartile dividend yield-- had the most impact on the performance. And currently we are at one of those extreme ends of the valuation range. You are right that if you were in the middle part of the range there was no readily available conclusion, but we are not currently in the middle range. We are in a top quartile dividend period, so I believe that is a good signal for the potential returns for Japan’s markets.
Valuation + Monetary Policy = Bullish Stance On Japanese Equities [View article]