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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: goldsnow who wrote (549)	11/30/1997 9:07:00 PM
From: Tharos	Respond to of 3902

goldsnow, I've been investing since '71, so have been through a couple bears. After the first one a person tends to learn how to make money in bear markets. Historically an investor can expect 12.9% on average. This would be within any 10 year rolling window since '29. If you include '29, then no 10 year window has lost money. I concur with your belief that many new to investing have been conditioned to expect triple average earnings. A problem I perceive in the US that the Japanese don't have is high personal debt. Takes 6 million yen to open a margin account. The economy here is designed around cash, not credit cards. Culturally you try to pay off as many bills as you can at year end because it is bad luck to enter the new year in debt. Compare that with US average debt. Have read some stories indicating the recent bull run has prompted some to max out their cards and put the money in the market. Spooky thought, someone fully leveraged on money they borrowed via a credit card. I believe that as long as the Japanese gvt can afford to protect the individual depositor, the ramifications of bank failures will be minimal. I do agree that there is a potential for flight to gold. This did not happen in October's two day correction. Certainly CB sales and the Austrian position have a great deal to do with that, but gold is more of a "safe haven" than an investment. As long as the large economies are not experiencing any significant inflationary pressures, there will be no drive for investors to hedge with gold. IMHO