Japan’s Historic Moment Creates Historic Confusion

by Ryan Cole, Investment U Research Team

The dust is settling in Japan, and the only thing we know for sure is that no one can agree… on anything.

With the new government in office – the first real time Japan has been ruled by any group other than the Liberal Democratic Party (LDP) since the country became a democracy – there’s plenty of mystery and not much clarity, though everybody seems to have an opinion.

One commentator says government stimulus is about to go wild: Buy Japanese everything, she preaches, especially banks. But another disagrees: The too-cozy relationship between Japan’s government and contractors is now over, he maintains, so short Japanese construction. A third claims not much will change: Japan is a conservative ship that turns slowly, if at all. Yet still another says we’ve never really known Japanese ...

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Lessons From Japan’s Great Depression

by Alexander Green, Oxford Club Investment Director

Monday I wrote about investment lessons from the Great Depression. Chief among these is that if you bought stocks after the Dow declined 50% from its 1929 peak, you did very well in the decade ahead, even though stocks continued to fall for the next 18 months.

In the decade from January 1931 to January 1940 - amidst the worst economic stretch in our history - bonds, real estate, commodities and cash all lagged the long-term performance of the Dow with dividends reinvested.

That’s a surprise to most investors - and a head’s up to those wondering what the heck to do with their money now that the Dow has lost half of its value.

But what about the other Great Depression, the recent one in Japan? In 1989, the Nikkei 225 traded above 40,000.

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