- 18x p/e with ultraloose monetary policy which will likely continue in the future. Very high equity risk premium (gap between risk-free rate and earnings multiple).
- NIKKEI 225 still below 1987 peak (incredibly). Potential price discovery phase if price can break out above that level. BoJ determined to stoke further inflation. If they can rid the economy of the deflation which has blighted it since 1987, that should be a big positive for stocks.
- Yen is weak and could be a favourable time for westerners to use their strong currency to buy yen assets.
- Japan is quite politically neutral and potentially a safer haven in a turbulent geopolitical environment
Leave a Reply