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If you are already invested in Japanese equities the "safe" play is to try to take some cash off the table to defend against what could be a bleak revenue pictu

If you are already invested in Japanese equities the "safe" play is to try to take some cash off the table to defend against what could be a bleak revenue picture in the near future. If you are not yet in that market then there might be a long term play investing when these stocks are weak. Id assume most here who advocate buying are in this boat. Both buying and selling may be the correct play depending on your current position.

dasil003 16y ago
Aren't those sunk costs though? Isn't the real question whether the market's information is overly optimistic or overly pessimistic? Given perfect information in the market wouldn't we expect it to be 50/50 based on true uncertainty about the future? These aren't rhetorical questions, this is just my line of thought based on my relative ignorance of investing.
- lukeschlather 16y ago
  Person A has lost 50% of assets in Japanese stock, and cannot afford to drop to 30%. Person B has money they're interested in investing long-term, and is not afraid to take a 40% hit up-front for the possibility of a long-term 20% gain. So there we have perfect information about the stocks' long-term performance, but two situations in which both buying and selling the same stock is wise, or at least understandable.
  - patio11 16y ago
    In particular, person A may very well have margin requirements to meet, which means that they literally cannot not sell right now.
    - geekman 16y ago
      Or may need the cash to rebuild their house, or to keep their business or their household afloat until the economy starts moving again.
- sunchild 16y ago
  People who need cash will sell at a depressed price. People who have cash will buy from them. The overall optimism for Japan's recovery is likely to be based on at least some hard facts: Japan is a leading national economy on the world stage, historically a huge producer/innovator, and proved after WWII that they can recover fast and big. Not a bad bet, barring another catastrophe such as earthquake further South, pan-Asian war, etc.
  - mey 16y ago
    Define fast and big. 7 years of foreign occupation occurred, with all the good and bad that comes with it. http://en.wikipedia.org/wiki/Occupation_of_Japan http://en.wikipedia.org/wiki/Occupation_of_Japan
    - sunchild 16y ago
      I was referring to Japan achieving the 2nd (now 3rd) largest economy within 40 odd years following near total annihilation. Not really interested in debating that point either, in case that's where you're heading...

dasil003 16y ago

Aren't those sunk costs though? Isn't the real question whether the market's information is overly optimistic or overly pessimistic? Given perfect information in the market wouldn't we expect it to be 50/50 based on true uncertainty about the future? These aren't rhetorical questions, this is just my line of thought based on my relative ignorance of investing.

lukeschlather 16y ago
Person A has lost 50% of assets in Japanese stock, and cannot afford to drop to 30%. Person B has money they're interested in investing long-term, and is not afraid to take a 40% hit up-front for the possibility of a long-term 20% gain. So there we have perfect information about the stocks' long-term performance, but two situations in which both buying and selling the same stock is wise, or at least understandable.
- patio11 16y ago
  In particular, person A may very well have margin requirements to meet, which means that they literally cannot not sell right now.
  - geekman 16y ago
    Or may need the cash to rebuild their house, or to keep their business or their household afloat until the economy starts moving again.
sunchild 16y ago
People who need cash will sell at a depressed price. People who have cash will buy from them. The overall optimism for Japan's recovery is likely to be based on at least some hard facts: Japan is a leading national economy on the world stage, historically a huge producer/innovator, and proved after WWII that they can recover fast and big. Not a bad bet, barring another catastrophe such as earthquake further South, pan-Asian war, etc.
- mey 16y ago
  Define fast and big. 7 years of foreign occupation occurred, with all the good and bad that comes with it. http://en.wikipedia.org/wiki/Occupation_of_Japan http://en.wikipedia.org/wiki/Occupation_of_Japan
  - sunchild 16y ago
    I was referring to Japan achieving the 2nd (now 3rd) largest economy within 40 odd years following near total annihilation. Not really interested in debating that point either, in case that's where you're heading...