This is a tough bet. My first reaction was, "They are going to open up their wallets and spend like crazy to rebuild." Then I heard on the news that Japan runs a massive fiscal deficit and I thought, "Where are they going to get the money." When the market cools, it might be good to pick individual stocks (construction and pharma come to mind). Right now though, staying out of the broader market (index funds, etc.) might be prudent.
Bottom just fell out of Nikkei
81–90 of 137 posts
Re: Bottom just fell out of Nikkei
#82It seems like everybody in this thread is saying "No duh, invest in Japan right now!" The assumption is that the market will turn around, and anybody who buys into Japanese companies stands to make a lot of money. If this is the case, then why are the prices going down at all? Are other investors really that ignorant?
Just guessing but if you are doing short term trading isn't it better to sell if you think it can go down a bit more then buy at the absolute lowest price.
Re: Bottom just fell out of Nikkei
#83Earlier quoted context omitted.
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.
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.
In particular, person A may very well have margin requirements to meet, which means that they literally cannot not sell right now.
Re: Bottom just fell out of Nikkei
#84Disasters like this are, in theory, actually beneficial to economies--especially stagnant ones like Japan's. The capacity for immediate bonafide economic growth has been diminished but that doesn't mean that economic production will decline. There is now ample room to deploy all that surplus capital (humans, machinery, money) that was previously unproductive. The upper echelones of the financial sector will make a ki…
Only an economist can consider a theory like that for more than a few seconds and not laugh hysterically. As Tom Woods has said, following this logic, the best thing we could do for our economy is build a huge armada of amazing battle ships, have Japan do likewise, then float them to the middle of the pacific and, after evacuating them (surely, the loss of human life is not a necessary component in this economic model, is it?) blow them all up.
Rinse, wash, repeat. We're all rich!
Re: Bottom just fell out of Nikkei
#85Disasters like this are, in theory, actually beneficial to economies--especially stagnant ones like Japan's. The capacity for immediate bonafide economic growth has been diminished but that doesn't mean that economic production will decline. There is now ample room to deploy all that surplus capital (humans, machinery, money) that was previously unproductive. The upper echelones of the financial sector will make a ki…
Only an economist can consider a theory like that for more than a few seconds and not laugh hysterically. As Tom Woods has said, following this logic, the best thing we could do for our economy is build a huge armada of amazing battle ships, have Japan do likewise, then float them to the middle of the pacific and, after evacuating them (surely, the loss of human life is not a necessary component in this economic mode…
Empiricism is not on your side. The richest country in the world spends more than its fair share on 'a huge armada of amazing battle ships', actually, as much as everyone else on the planet put together, and also actively seeks out remote spots of the planet to blow stuff up in.
Rinse, repeat, very rich.
Re: Bottom just fell out of Nikkei
#86The ad I saw on the right side seems highly inappropriate. Or, perhaps, appropriate - I'm not sure.
http://adb.nikkei.co.jp/ad/logo/2008b/NikkeiWeekly080722-NNI...
Re: Bottom just fell out of Nikkei
#87It seems like everybody in this thread is saying "No duh, invest in Japan right now!" The assumption is that the market will turn around, and anybody who buys into Japanese companies stands to make a lot of money. If this is the case, then why are the prices going down at all? Are other investors really that ignorant?
Learn the lesson of what happened to BP after they bottomed out.
Re: Bottom just fell out of Nikkei
#88It seems like everybody in this thread is saying "No duh, invest in Japan right now!" The assumption is that the market will turn around, and anybody who buys into Japanese companies stands to make a lot of money. If this is the case, then why are the prices going down at all? Are other investors really that ignorant?
your perception of risk may be different from others'. but the market can only express one (money-weighted) average.
also, as others have pointed out, your circumstances may differ from others'.
Re: Bottom just fell out of Nikkei
#89It seems like everybody in this thread is saying "No duh, invest in Japan right now!" The assumption is that the market will turn around, and anybody who buys into Japanese companies stands to make a lot of money. If this is the case, then why are the prices going down at all? Are other investors really that ignorant?
Happens so, so often. A great example (very YC suited!) is Apple's stock prices in January. When Steve Jobs announced his medical leave just under two months ago, the Apple (AAPL) price opened the next day (Tuesday) down 5.44% on Friday's close price. The low point on Tuesday was 6.45% lower than Friday's close price. While the price did go back up a bit that same day (the Tuesday close was only 2.25% lower than Frid…
[deleted]
Re: Bottom just fell out of Nikkei
#90Earlier quoted context omitted.
Unless you really want to play with buying/selling individual stocks, you're probably best off buying a broad-based index fund, which effectively buys you a slice of the entire stock market. Eg VTSMX/VTSAX Also, are your 401k and IRA/Roth fully funded? Be sure to do that first. (Assuming USA resident here)
Could you make an argument for bothering to fund 401k + IRA/Roth at 20-something? If I'm trying to get fuck-you money by 40, don't I need every dime in order to get there? My nest egg is in plain old savings right now because I view it as personal runway.
I don't understand your implication that striving in a career endeavor requires that you spend all your income with nothing going to savings. If anything, healthy savings will allow you to take advantage of an unexpected opportunity, and/or lessen the impact of an unexpected obstacle. This 'backup plan' will also make it easier to take risks without having to worry as much about the potential for failure. In other words, savings provides you with options.
But that's in terms of general savings. For retirement more specifically, you should definitely start now if you can afford it, due to the effects of compound interest. Try playing around with an interest calculator[1] to see why. But perhaps the best reason is that once you're 40 and have had a few curve balls thrown at you, you'll appreciate that regardless of how things turned out, you'll have put yourself in a good place financially for the long-term.
For the record, I'm in my mid-20s myself, and across my Roth and my employer's SEP-IRA, around 20% of my income is going towards retirement (with other non-retirement savings on top of that). I've set up my direct deposit such that the Roth contributions are totally automatic. It just gets dumped into three index funds: US Stock, Intl Stock, and Bonds. I basically never need to think about the accounts except when rebalancing. It's nice.
[1] Here's one: http://www.dinkytown.net/java/WaitCost.html