Tuesday, May 21, 2013

It looks like a bull market in Tokyo


Two weeks ago, in Manila living a Travelife, I had dinner at Masseto with three fund managers visiting from overseas, all living in different countries but with an interest in Japan.

Two were in Manila on holiday and one was actually here to pick up a couple of apartments as a rather spur-of-the-moment investment.

He believes Manila is a good buy and that prices will rise over the next ten years or so because the Philippine economy is strong and we have the right demographics.

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We had dinner at Masseto. Together with a few other people, we formed a long table on one side of the restaurant.

One of the fund managers was someone I'd last seen in Tokyo in February.



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SNOW & THE JAPANESE ECONOMY

At that time, we'd had this interesting conversation about the Japanese stock market as we were walking in the winter cold through some very quiet neighborhoods in Central Tokyo to a party at someone's home.



He'd been as sure of everything in his world on that evening, as he was sure of the impending rise of the Japanese stock market.

I'd even recounted our conversation in this blog.

TWO WAYS TO PLAY THE STOCK MARKET.
BOTH IN THE SAME DIRECTION.

One of the most interesting things he'd said to me then, on that very cold night, was this: "There are only two ways to play this market. Either you go long, or you go very long. And, for goodness sake, find some way to short the yen because it's going to drop."

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EVERYONE THINKS THEY KNOW EVERYTHING

Tokyo's finance industry is littered with people who think they know everything.

So you really need to know who to believe and who to take with a grain of salt. When you get used to it, it's quite amusing, actually. There's never a dull moment at a dinner table.

But this is one of the guys I actually pay attention to.

I know he takes what he does incredibly seriously. This is also why I bothered to recall our conversation for public consumption.

LOOKS LIKE I MADE IT...

Anyway, at Masseto two weeks ago, he was full of an attractive kind of self-satisfaction.

Of course. The Nikkei was up -- and it still is -- since I'd last seen him.

And he was leading the pack of hedge fund managers who were soaring way past the index performance.

When I saw him in Manila, I didn't need to ask him if he was making a ton of money because he had SUCCESS written all over him.

He and the two other guys were ordering rounds of champagne and bottle after bottle of red wine as if it was a bull market all over again.

It is, actually. Or at least, it's starting to look like one.

A ONE-WAY CONVERSATION
I ACTUALLY UNDERSTAND

Anyway, we ended up sitting next to each other, and at first opportunity, he'd said: "What did I tell you?"

Just like that. Of course I knew what he was talking about. It's all anyone in finance in Tokyo can talk about these days.
I just smiled, but we certainly understood each other. Because he then said: "20% in the last few weeks alone."

Can you imagine having this kind of conversation?

It's one-sided but we're communicating perfectly.

WHAT THE FUTURE HOLDS



That's when I asked him: "Do you think it's got way more to go?"

He smiled like a kid at Christmas, and replied: "This is just the beginning. This is going to run for about a year. And, unless some disaster happens, it's not going to drop. It's going to be like a staircase, so make sure you're on it."

"And the yen?" I asked.

He shrugged. "120 in the next three months, perhaps. Make sure you're not holding it."

This conversation went on for quite a while -- too long to recall here, actually -- before another day ended in my never-ending, and never-endingly eventful Travelife.





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