Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: BigShoulders who wrote (17765)	3/17/1998 10:38:00 AM
From: Clarksterh	Read Replies (2) \| Respond to of 70976

BS - While you are right that there hasn't been a crash in the Nikkei in some time, the erosion of their asset valuations means they may now be fairly valued or maybe even undervalued especially, relative to the U.S You need to remember that the Japanese started with a very high p/e in the late 80's, so even with a drop in value of 50% they were still not 'undervalued'. Since then they have had little GDP growth, and they have probably increased the percentage of non-performing assets. Thus, I suspect that the Nikkei is susceptable to another steep fall. (Anybody know what the current P/E is for the Nikkei?) The so called "big bang" is coming soon where they are freeing government control of the financial system. Where? As an ex-MoF said, 'A change in the financial system can only occur by direction from the top, but we Japanese manage by consensus. Therefore we can only change if there is a disaster.' Or, to paraphrase the current MoF 'We won't let any more banks fail.' There is a confidence inspiring thought! None of this is to say that Japan can't recover, but I think it is unlikely without a preceding crash (just as the crash of '29 caused the US to restructure massively). Clark