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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up?
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To: borb who wrote (1051)5/27/1998 11:43:00 PM
From: Step1  Read Replies (1) of 3902
 
Food for thought... Had a very interesting talk with a friend of mine,
active business man of 58 years of age. His age certainly give him a bit of perspective in the markets...

These are the main points he made during our conversation;

THere are two possible most likely scenarios short term:

1- the US market rallies and reaches 10,000 or higher. That should help keep the Japanese economy just barely crawl along, while hopefully meaningful reforms are brought in. = the Nikkei stays the same.

2- The US market has a steep correction. That would bring a lot of pain to Japanese companies counting on US exports to survive. Initially a steep drop in the Nikkei, to 10,000 perhaps but long term outlook better after a good blood letting. Reforms would be forced upon Japan that way.

He made essentially 3 points:
Best case scenario is still not good enough from the point of a risk reward relationship.
Worst case scenario is pretty scary.
Japan is still not a buy.

he also does business in the US as well, in Seattle if anyone is from that area.

Something else we talked about and his comment was interesting on that too. What is value? As Chirodoc has mentioned in his past message about devaluation and deflation, value becomes really hard to assign.

My friend was saying, if you look at a plate that sells for 100 dollars and then a few years later it sells for 20, then someone else offers you 5 , what is its real value? Is it expensive at 5? Is it a deal? He said we just don't know what is the value of an asset anymore because it just keep falling and we don't know when it will stop.

sg
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