Cassandra Does Tokyo
From one investor/blogger, that we admire from afar, who observes Japan in detail. Anon Post on her blog:
"Earnings and sales have risen dramatically since the nadir, with 08 & 09 estimates barely deprecated, but prices absolutely slaughtered in sections of the market.
This has made price to prospective earns hugely attractive both absolutely and in an historical context.
Response: BUT....before one gets too excited, the market is more often than not ahead of the sparse estimate information, meaning forecasts inevitably will be coming down further.
And managements are like deer frozen in the headlights, for visibility has deteriorated dramatically...
and a storm heretofore unseen is heading their way with implications that are almost impossible to gauge in the form of crashing US demand,
a 15% yen appreciation with more perhaps to come, rollicking commodity input-price inflation, and a likely sharp drop in capex exports to China.
Add to this teetering Europe, and some over-extended EMs, and there is a possibility
of the first synchronized recession in two decades, something that would have untold effects upon Japan.
Throw in to the soup that Japan is in the worst fiscal position of any OECD nation (and that includes Italy!!),
and while households are underleveraged, and corporate balance sheets are in good shape, household savings rates are hovering at zero.
And the demographics continue to worsen. Doesn't do much to make one bulish. Global asset values are set to continue to contract...
I personally still value a market oriented hedge, since the coming storm looks set to be doozy...
and it would be a shame to squander good alpha, for the sake of being piggy, only to get wiped out by the unhedged beta. Good luck all the same....
The Nattering One purrrrrrs... smart is sexy.
Nicholson & Freeman have their "Bucket List", the Nattering One has his TOP 10 reasons why, "it is different this time".
Cass posts her TOP 10 Out with the Tide... which we appreciate as a worthy top 10 and a must read...
"Change is nigh.
There are many things, and much flotsam, that I (perhaps contentiously depending upon your values) will be pleased...
to see [permanently] wash back out to sea, as the unnaturally not to mention imprudent high tides in credit and leverage recede."
Its a list reminiscent of... What do you call 100 dead politicians & judges at the bottom of the sea? A good start.
"Earnings and sales have risen dramatically since the nadir, with 08 & 09 estimates barely deprecated, but prices absolutely slaughtered in sections of the market.
This has made price to prospective earns hugely attractive both absolutely and in an historical context.
Response: BUT....before one gets too excited, the market is more often than not ahead of the sparse estimate information, meaning forecasts inevitably will be coming down further.
And managements are like deer frozen in the headlights, for visibility has deteriorated dramatically...
and a storm heretofore unseen is heading their way with implications that are almost impossible to gauge in the form of crashing US demand,
a 15% yen appreciation with more perhaps to come, rollicking commodity input-price inflation, and a likely sharp drop in capex exports to China.
Add to this teetering Europe, and some over-extended EMs, and there is a possibility
of the first synchronized recession in two decades, something that would have untold effects upon Japan.
Throw in to the soup that Japan is in the worst fiscal position of any OECD nation (and that includes Italy!!),
and while households are underleveraged, and corporate balance sheets are in good shape, household savings rates are hovering at zero.
And the demographics continue to worsen. Doesn't do much to make one bulish. Global asset values are set to continue to contract...
I personally still value a market oriented hedge, since the coming storm looks set to be doozy...
and it would be a shame to squander good alpha, for the sake of being piggy, only to get wiped out by the unhedged beta. Good luck all the same....
The Nattering One purrrrrrs... smart is sexy.
Nicholson & Freeman have their "Bucket List", the Nattering One has his TOP 10 reasons why, "it is different this time".
Cass posts her TOP 10 Out with the Tide... which we appreciate as a worthy top 10 and a must read...
"Change is nigh.
There are many things, and much flotsam, that I (perhaps contentiously depending upon your values) will be pleased...
to see [permanently] wash back out to sea, as the unnaturally not to mention imprudent high tides in credit and leverage recede."
Its a list reminiscent of... What do you call 100 dead politicians & judges at the bottom of the sea? A good start.
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