Lessons of a Japanese Milestone

The Dividend Cafe

The Dividend Cafe - The Bahnsen Group

Business, Estate Planning, Retirement Planning, Wealth Management, Investing, Monetary Policy, Dividend Growth Investing, Macro Economics

4.9 • 572 Ratings

🗓️ 23 February 2024

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today's Post - https://bahnsen.co/3uNB8E7

History was made this week, and no, I am not talking about DA Jack McCoy retiring after 400 episodes on Law & Order, but rather the Japanese Nikkei closing at 39,098 on Wednesday night, its highest close in history, surpassing the previous closing high … which was (wait for it) … December 29, 1989. Yes, almost 35 years ago the Nikkei closed at 38,916, and finally re-reached and exceeded that level this week. It gives new meaning to the expression “buy and hold.”

But beyond the statistical and numerical takeaways of what may seem like a distant story unrelated to the plight of American investors, the tale of modern finance embedded in the last four decades of Japanese economic life is one for the ages. It has been a mild obsession of mine for many years, and I fully intend to finish a deeper white paper on the entire saga in the years to come. But today is not that white paper, as exciting for your insomnia as that prospect may be. Rather, I want to provide a succinct look at the history of what happened and what a key, if not the key, takeaway of the whole thing is for American investors.

Jump on in to the Dividend Cafe, and let’s pretend we left off in the mid-1980’s, in a very different time than we find ourselves today, Yet in many ways, perhaps not that different at all.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Transcript

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0:00.0	Welcome to the Dividend Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life.
0:12.3	Hello and welcome to this week's Dividendin Cafe. I am about to give you a very Japan heavy weekly dividend cafe, but I am not recording in Tokyo.
0:23.4	I'm recording in Greenville, South Carolina.
0:26.7	I spoke at a Christian university last evening, and now I'm heading back to California,
0:33.2	but want to talk about a very significant event that took place this week.
0:40.3	And in a sense, has been taking place over 35 years.
0:45.7	And it has profound implications for U.S. investors.
0:49.9	So I like to get kind of granular and niche at times with Dividing Cafe topics, but I don't get
0:57.1	that idiosyncratic where I am going into a topic that I recognize, even though it may be
1:04.5	intellectually interesting to me and maybe to some listeners or readers, is going to have very little relevance to most people.
1:13.4	I'm talking about Japan because of the relevance I think it has for anybody who's reading,
1:19.4	listening, watching. What took place to give specific numbers this week is that the Niki closed on Wednesday night,
1:30.2	so going into Thursday morning U.S. time at 39,100.
1:36.9	And that represented a new all-time high for the Niki, closing prices.
1:49.4	And the last time the Niki had a closing high was December 29th, 1989. I was literally in high school and we were literally fighting still near the end of the
2:00.3	Cold War.
2:01.7	We had just had less than one year of the George Bush senior presidency.
2:08.5	That is where the NICA last had its all-time high until this week.
2:16.9	Now, granted, I mean, it isn't like UCLA has on a
2:21.1	Rose Bowl or anything through any of this period of time. You've got to go back to the 1986
2:25.2	season for that. But still, you're talking about a very long period of time to go from an all-time
2:32.9	high to a new all-time high, 35 years in between.
	...

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