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I keep warning people when I hear them say just dollar cost average into the stocks, it'll come back at some point always does. I show them Japan's NIKKE. Oh, that can't happen here. Over the last decade I show them the CAC and FTSE and some other exchanges. Oh, that can't happen here. I explain Japan is a decade and a half ahead of us in all aspects of what we've already done: 1) Deregulation of banking sector (removal of Glass Steagal, allowing easy company stock buy backs). 2) Retail trading frenzy 1.0 in the 90's and 2.0 now, etc. 3) Near 0% to 0% interest rates. 4) Borrowing frenzy fueling asset prices covering up lousy real wage increases if any even in nominal terms. Japan. They're the looking class into our immediate future. Particularly what it looks like in stocks and real-estate. Yet we have hardly the social safety net that Japan has: 1) we lack universal healthcare 2) we lack labor rules that ensure solidarity in employment wages and benefits. 3) We lack a housing authority and planning system that hasn't even coped with the last real-estate bubble in prices resulting in even more shortages of housing and even higher housing prices that were already un-affordable then and even more so now, and this time rents are well beyond affordable; many retirees and working people living in tents and RVs already; this only gets worse. 4) political instability fueled by political propaganda derision cultivating a lunatic fringe that has adopted beliefs that are completely factually wrong have become mainstream accepted as if fact. Essentially, you have potential for worse than a lost generation. You have collapsed super power similar to the scale of USSR, Russia in specific, even similar to dissolution of Yugoslavia. Either economic collapse or complete governmental collapses neither is good for us Americans. We're very much fucked in the pants unless we adapt some social policies, regulate the financial system, prop up our labor and industries, and hold to account would be robber barons trying to pull a fast one... the feigning argument that we can't regulate because the rich will always find a way out of such regulation is bogus... so we capitulate and aqueous? Do we do this for people who murder, rape, steal, endanger, kidnap, etc.? Anyway we have some serious inflection points, our nation either changes to address them, or it looks bleak for us all.
@@jmitterii2brilliant perspective jmitt. Pass that along to Yours and My countries economists! Sad thing is , it is the method of governance which appears to being undone good ideas. Time to hear the collective voice of nations prepared to build on the People voices. Let the Dog wag it's bluddy tail instead of the way it is. There must be a way to reconnect with the early beginnings of the Greeks democracy. It may well be staring Us all in Our faces 🤔. Best to You . Kind regards Stephen australia ✌️
I watched this 8 months ago, and it stuck in my mind. 8 months on, I came back to it because of what is now happening consumer price index and inflation. @PensionCraft, what are your thoughts now?
I own a Japanese tracker fund and it has performed admirably for the last couple of years. The top ten holdings are brilliant companies and I feel that there is some value in these businesses and are worth holding for a long time.
Thank you Ramin, I also did some research earlier about Japan economy, following the bubble burst its economy stagnated driven mainly by strong yen from mid 1990s and onwards. The analogy with the US economy is interesting, however in my opinion the weak US dollar over recent months will keep the US economy more competitive and with more upside potential for equities (as equities are discounted in foreign currency terms). Many thanks for the interesting content that you produce.
Bitcoin is the future of crypto and the question traders ask themselves now is if this is right Time to invest? before jumping into conclusion I think you should take a look at things first.
I'd be interested to hear how this compares to the Feds massive position in mortgage backed securities and what the fallout of a national depression and widespread mortgage default would be.
Love your channel, but the united states is different from japan. The us dollar is the world reserve currency. Comparing apple and orange. Both are fruits yet they are different
Hi Tom that's right, and at the end I said that the analogy is never perfect but there are interesting similarities e.g. the huge increase in the money supply and low interest rates combining to create low inflation but a huge bubble in asset prices. And it ended with a series of rate rises. Thanks, Ramin.
You've got a native's approval. We just call the post bubble period as 'the lost 30 years' this could be extended. I personally think, Japan will shirk further since single rate is currently surging and expected to reach 47% in 2040. This will accelerate the decrease in labour force.
Hi Martin I don't have access to total return time series for Japanese bonds. But if there was deflation nominal (normal) Japanese government bonds would have been okay (inflation is bad for them, deflation is "good" for them). Thanks, Ramin.
Hi Hamid, love your surname. You're right I could have mentioned that but it was about the bubble period in the late 80s and its aftermath rather than today. Thanks, Ramin.
Ramin, are ageing demographics inflationary or deflationary? Surely a reduction in the productive workforce means reduced supply and unchanged demand which is very inflationary?
Great video Ramin (as always?!) I distinctly remember being taught in my Standard Grade Geography that the exclusive reason that Japanese land prices were so high was that they had "no flat land" ! Richard Werners writings on post war Japan, the BOJ and the MOF are absolutely fascinating. Well worth a read.
Lol. When I was eight, my teacher taught the class that the moon changed shape each month because clouds would cover the moon. Another teacher taught us that sound travelled faster than light 😂 In later years I subsequently developed a healthy skepticism to the “facts” contained in textbooks & promulgated by professors, which has made me rather unpopular.
while I agree with the underlying argument, isn't looking at the index value only a bit misleading? I.e. we're not accounting for dividends. I think. Or was the TOPIX graph a total return one?
Great video, one of your best. I wondering if things start to go south when this bubble reaches its climax, whether it would be best to make the cardinal sin of selling rather than holding on as its unlikely to be a v shaped recovery
A difference with Japan is the bankers and others realized they could borrow money cheap and invest in assets outside of outside the country. So inflation of the money supply led to the money leaving and the country rather than inflating the internal stock market. Now with global inflation assets just become the only place to hold wealth without having it inflated away by all central banks. The only question is which assets, how long, and what threshold of interest rates before it comes crashing down.
Awesome video, found your channel last week and i am hooked! Could you do a video on analyzing what fields of the Japanese economy or investing in the market still worked in that time ?
i have been corrected for suggesting our current US asset bubble could be like Japan. i see there are differences but wonder how much of that is influenced by exceptionalism
Hi A G Smith I think a lot of the parallels are interesting, but this is certainly very different overall. I think it always pays to understand what happened in the past as it calibrates our expectations about the future. There's never a perfect analogy from history but there are always useful bits which are comparable. Thanks, Ramin.
Hi @TemptationJewellery thank you! What I took from Japan is not to worry too much about inflation which has consequences in terms of whether bonds are a good idea but also whether to buy inflation linked bonds or nominal government bonds. And also the nature of this bubble is a more productive tech bubble rather than a politically contrived bubble as we saw in Japan in the 1980s. Very few of the companies formed in Japan in that bubble went on to list via IPOs so that's fairly clear evidence that there was a lot of misallocated capital. Thanks, Ramin.
@@Pensioncraft I was also fascinated by the fact that all these companies were interlinked - so when one goes so do the others. I guess, bitcoin aside, that isn't something we need to worry too much about here
Thank you for your videos, they are full of fantastic information. Do you have any plans for making a video about UK investments over the next few years now the UK is out of the EU and what you think the future holds for the UK stock market?
Thanks as usual highly insightful and alot of factual research behind it - greetings from Singapore. One suggestion - the chart's fonts are a tad too small when watching from aTV 7+ feet away - perhaps larger fonts for x,y axis and data points ?
The UK govermnent has cut business rates, which is the tax on shops linked to the value of the property. Also it has given out loans to shops/high street businesses or even grants which is giving money to businesses to keep them going.
So do you think this US (and possibly global) bubble will pop soon - say in the next 3-4 months or this year? It could be popped by yield rise or a covid set back. You mentioned the US bubble is differentiated from Japan bubble by money going into innovation companies but isnt everything in a bubble right now...real estate, bonds, equity (growth and value to a certain extent)? even if you argue value companies are not in a bubble, arent there enough similiraties to call this a very high risk bubble similar to Japan bubble. There are even govt intervention and zombie company similarities. If indeed we are in a serious bubble, do you suggest holding on to US equity even though if bubble pops,the prices may take years to come back.
Hi R M not all sectors in the US are equally overvalued e.g. financials, healthcare & utilities have the lowest forward P/E vs their own history. And not every country is overvalued. But the most overvalued companies right now are the growth companies which tend to be centred on disruptive technology which is innovative and contributes to growth. It's just that we're having to pay too much for them they're certainly not all zombies. I wouldn't be comfortable paying these prices for disruptive tech stocks. But if you buy a global index you'll be buying a bit of other countries and sectors which aren't as overvalued. You don't know how long the bubble will continue to exist. It may be that earnings rise to meet valuations gradually without a big selloff (unlikely, but possible) deflating the bubble gradually and if you hold back investment you'll miss out on those gains. You should at least consider that scenario. Thanks, Ramin.
Such a cautionary parable should be painted in blue on a porcelain plate. The rise of long term bond rates recently certainly showed a few sympathetic echoes :-)
Excelent! Thanks Ramin! Talking about inflation, I would like very much a similar video on Hyperinflation in the Weimarer Republik. Any similarities with the current situation? Do you agree with Michael Burry´s recent warnings? Muchos saludos :)))
@@Pensioncraft an epic, epic housing bubble being prodded on and propped up by the government. The government backs the overwhelming majority of high ratio (7x the median household income. Toronto home prices have tripled since 2006. That might not sound so bad if you don't consider that we have the third highest rate of household indebtedness in the G20 at 177% of disposable income and that was before the pandemic. RE accounts for 46% of our GDP growth since 2018. We have very low rates and crooked mortgage brokers who can get almost anyone a loan because of lots of private lending. With almost no barriers to entry, the number of RE agents in Ontario where I live has jumped 30% since 2012. Even the agents have FOMO. RE is constantly in the news. The situation fulfills all the criteria of the bubble triangle and it's getting worse. Our Housing Minister Adam Vaughan said the quiet part out loud a few weeks ago: this market is great for foreigners and not so much for Canadians. He won't even tolerate a 10% correction. Mind you, the IMF said we were 54% overvalued back in 2019. As for overstimulating. The pandemic stimulus was oversized. It's estimated that we lost $53B of income but the income support given was $71B. I first realized that something was desperately wrong when I was looking to buy in 2017. FYI, I work in tech, have an MBA and 14 years of experience. My income was in the 90th percentile then and is in the 95th percentile now and I'm priced out by my standards. I have no debt so banks will give me a mortgage of ~$600K but at 1.7% interest I know the principal would ruin me financially when rates normalize. We have 5 year mortgage terms here amortized over 25 years. I might be cutting it close for the first term but I couldn't stomach 4% at that kind of principal. There is a mortgage stress test but there are ways around it. I'll log onto the Patreon Slack to request a video on Canada's RE market. We are staring down the barrel of a 12 gauge pump shotgun financial crisis.
@@Pensioncraft Meant to say Hi! Predictive text! Haha. I see the "Global Minimum Volatility Factor" is no longer available. Is there a good alternative? Thank you Ramin
Hi Ramin - another excellent video. I have often wondered what happened to Japan and what caused the bubble It is significant that land values and the credit associated with land was a major factor in the creation and then deflation of the equity market. Phil Anderson has written a book about the long term cycle (18.5 years) of the equity and property market - and the main thesis is that the credit created by rising land prices follows a predictable pattern of boom and bust - worth a read, if you have not already read it
What a video, great! Do you think the recent market ''dip'' is just a short lived thing and will people be back to buying speculative stocks & bitcoin in no time, or is this finally the start of the big correction? What do you think Ramin?
Nice video!! Very engaging from beginning to end. Nevertheless, businesses and investment are the easiest way to make money irrespective of which party makes it to the oval office.
how could/should the FED increase interest rates within our lifetimes ever again when US debt is at "over the top of over the top"-levels? interest payments alone would lead to certain state bankruptcy.
Congress could zero out the Fed’s balance sheet which would “magically” get rid of a lot of that debt. Whether that’s right or wrong is irrelevant. Same as when a country devalues its currency. It’s bound to happen.
If Fed did not rise interest rate (we all know they will keep rate low for long periods of time until Cp-lie up more then 2 % for a period of time) then we will not see a stock crash in our life time? Because by your research this will not cause real CPI to go up so no any concerns to rise interest rate?
Have you read 'The Princes of the Yen'? It seems to place all the blame on the central bank and its rivalry with the finance ministry. The central bank basically saw the plaza accords as an opportunity to grab power and end the role of the finance ministry to direct lending and thus shape the economy. The outcome (massive inflation followed by years of deflation) is the worst example of a central bank failure you can find, it also shows that central banks always win because it doesn't matter how bad the economy does, they never get any extra oversight or have any of their power removed.
If interest rates are going to pop the bubble why should the Fed increase interest rate, can they keep it low for a very long time like UK did for the past decade ??
One major difference between the US today, and Japan in the 80s (and the century & a half prior to the 90s), is that Japan was steadily & rapidly increasing in economic freedom (good for commerce) and Japan 🇯🇵 was producing tremendously & exporting Japanese products all round the world. The US is sadly no longer producing!
why does a rise in interest rate cause an issue? i understand credit becomes more expensive to pay back but don't understand why it affects the value of land? sorry a bit of a novice question
Hi kavit a lot of land & real estate is bought using credit and as credit becomes more expensive (as rates rise) the cost of financing increases and land & real estate become less affordable. Lending multiples are also important and tend to fall during a period of low economic growth, as happened in Japan following the bubble popping in the early 1990s. Thanks, Ramin.
Not this time my dear friend. We are living in different times with nothing but a bright future ahead of us. Long the /es :)! We are in the mist of the greatest bull market to exist.
The assertion that wealth has been created as measured by the rise in asset values is illogical. Has there been a significant expansion in tangible goods produced (and capital goods, in particular)? Not really. What we have experienced is a huge speculation-driven asset inflation. Actual capital goods do not appreciate over time; they depreciate. Real tax reform requires that so-called capital gains be treated as ordinary income and taxed at the same rate schedule as wages, salaries and other "ordinary" income. It would be system changing if the federal government combined simplification of compliance with real progressivity, a progressivity that captures much more income DERIVED from speculation in financial instruments and from rent-seeking privileges under existing law. What might this look like? Exempt all individual incomes up to the national median. Eliminate all other exemptions and deductions. Above the exempt level, impose an increasing rate of taxation on higher ranges of income. The rates and ranges would be determined in conjunction with the federal budgeting process.
![Quando Rondo - Grow Up [Official Music Video]](http://i.ytimg.com/vi/8zFnCg3BO4Q/mqdefault.jpg)
If you're interested in learning more about investing then why not become a PensionCraft member? Pensioncraft.com members can enjoy lots of benefits, so to find out more about these and how to join our friendly community please click here www.pensioncraft.com/investor-education/membership/
Please review Canada monetary situation, considering federal deficit and realestate market overinflation.
Wow that's so thoughtful. A RUclips channel that offers assistance directly. Muchas gracias.
Thank you Ramin, I love how you explained the economy. Subscribed, liked, and hoping one day I can contribute to Patreon
Hi @@gamagambogam thanks for the subscribe and it would be great to meet you on Slack one day as a Patreon member. Thanks, Ramin.
Finally, I understand Japan’s economic stagnation. Thank you!
Glad it was helpful @Kazeem Yinusa
I cannot help but wonder why the similarities between current situation in western economies and 80s-90s Japan are not discussed more publicly
Everyone knows 'this time it's different'.
deregulated non performing loans in 2008 ? sounds similar to me also
I keep warning people when I hear them say just dollar cost average into the stocks, it'll come back at some point always does.
I show them Japan's NIKKE.
Oh, that can't happen here.
Over the last decade I show them the CAC and FTSE and some other exchanges.
Oh, that can't happen here.
I explain Japan is a decade and a half ahead of us in all aspects of what we've already done:
1) Deregulation of banking sector (removal of Glass Steagal, allowing easy company stock buy backs).
2) Retail trading frenzy 1.0 in the 90's and 2.0 now, etc.
3) Near 0% to 0% interest rates.
4) Borrowing frenzy fueling asset prices covering up lousy real wage increases if any even in nominal terms.
Japan.
They're the looking class into our immediate future. Particularly what it looks like in stocks and real-estate.
Yet we have hardly the social safety net that Japan has:
1) we lack universal healthcare
2) we lack labor rules that ensure solidarity in employment wages and benefits.
3) We lack a housing authority and planning system that hasn't even coped with the last real-estate bubble in prices resulting in even more shortages of housing and even higher housing prices that were already un-affordable then and even more so now, and this time rents are well beyond affordable; many retirees and working people living in tents and RVs already; this only gets worse.
4) political instability fueled by political propaganda derision cultivating a lunatic fringe that has adopted beliefs that are completely factually wrong have become mainstream accepted as if fact.
Essentially, you have potential for worse than a lost generation.
You have collapsed super power similar to the scale of USSR, Russia in specific, even similar to dissolution of Yugoslavia.
Either economic collapse or complete governmental collapses neither is good for us Americans.
We're very much fucked in the pants unless we adapt some social policies, regulate the financial system, prop up our labor and industries, and hold to account would be robber barons trying to pull a fast one... the feigning argument that we can't regulate because the rich will always find a way out of such regulation is bogus... so we capitulate and aqueous? Do we do this for people who murder, rape, steal, endanger, kidnap, etc.?
Anyway we have some serious inflection points, our nation either changes to address them, or it looks bleak for us all.
Harry Dent interviewed by the guy at I love prosperity. Last week or so.
@@jmitterii2brilliant perspective jmitt. Pass that along to Yours and My countries economists! Sad thing is , it is the method of governance which appears to being undone good ideas. Time to hear the collective voice of nations prepared to build on the People voices. Let the Dog wag it's bluddy tail instead of the way it is. There must be a way to reconnect with the early beginnings of the Greeks democracy. It may well be staring Us all in Our faces 🤔. Best to You . Kind regards Stephen australia ✌️
I watched this 8 months ago, and it stuck in my mind. 8 months on, I came back to it because of what is now happening consumer price index and inflation. @PensionCraft, what are your thoughts now?
Great content as usual, full of wisdom and experience.
Ramin the Sage
Much appreciated
Tada! Now inflation and interest rate hike is here. This video aged really well so far. Thanks for all the great background provided here.
Glad it was helpful @Jan P. Monsch
Brilliant analysis as usual. You should write a book about all this knowledge.
Thank you
Great service 🌷
This is the most well-explained video I've seen on the topic.
I own a Japanese tracker fund and it has performed admirably for the last couple of years. The top ten holdings are brilliant companies and I feel that there is some value in these businesses and are worth holding for a long time.
The Japanese make great stuff that's also affordable. If it weren't for the demographics you wouldn't bet against them to turn it around.
Thank you Ramin, I also did some research earlier about Japan economy, following the bubble burst its economy stagnated driven mainly by strong yen from mid 1990s and onwards. The analogy with the US economy is interesting, however in my opinion the weak US dollar over recent months will keep the US economy more competitive and with more upside potential for equities (as equities are discounted in foreign currency terms). Many thanks for the interesting content that you produce.
Sir, thank you. I greatly appreciated your video.
You are an effective educator. Kudos.
Thank you Michael Felli
Thank you!
Great video. You're a fortune teller and here we are, history rhymes
Glad you enjoyed it @Hello
Thank you sir for your answer. Your research is the best.
It's my pleasure
thank you for great video!
from Japan
Thanks for watching!
Thank you for this insightful content. Subscriber a few weeks now. That fact that you do not hype things up is great. Thank you!
Best video, I always want to learn about the economy of Japan's boom and bust!
Spread your money among different asset categories like bitcoin and stock, then further allocate those funds within each category.
Bitcoin is the future of crypto and the question traders ask themselves now is if this is right Time to invest? before jumping into conclusion I think you should take a look at things first.
Stocks are good too 🤟 🇺🇸
I'd be interested to hear how this compares to the Feds massive position in mortgage backed securities and what the fallout of a national depression and widespread mortgage default would be.
Phenomenal video! Thank you!
You're very welcome! @Supernova
Love your channel, but the united states is different from japan. The us dollar is the world reserve currency. Comparing apple and orange. Both are fruits yet they are different
Hi Tom that's right, and at the end I said that the analogy is never perfect but there are interesting similarities e.g. the huge increase in the money supply and low interest rates combining to create low inflation but a huge bubble in asset prices. And it ended with a series of rate rises. Thanks, Ramin.
Ramin, another fantastic video with amazing charts. 👍 Also, a very stark warning. Thank you.
Glad you enjoyed it
Love the data to support opinion.
Wow. An eye opener 👀👀
Insightful and interesting as usual, thank you.
Hi Rod thank you! Ramin.
Quality content. Worth every minute.
Hi @Heather Hutchinson thank you for watching! Ramin
Very solid!!! 🙂
You've got a native's approval. We just call the post bubble period as 'the lost 30 years' this could be extended. I personally think, Japan will shirk further since single rate is currently surging and expected to reach 47% in 2040. This will accelerate the decrease in labour force.
Thank you, your videos are simply the best out there. by the way, what happened with the bond market prices in japan during those years?
Hi Martin I don't have access to total return time series for Japanese bonds. But if there was deflation nominal (normal) Japanese government bonds would have been okay (inflation is bad for them, deflation is "good" for them). Thanks, Ramin.
Ramin, Really excellent. A mention of the Japanese government's (CB) heavy interference in the equity markets (ETFs) was worth mentioning!
Hi Hamid, love your surname. You're right I could have mentioned that but it was about the bubble period in the late 80s and its aftermath rather than today. Thanks, Ramin.
Ramin, are ageing demographics inflationary or deflationary? Surely a reduction in the productive workforce means reduced supply and unchanged demand which is very inflationary?
Great video Ramin (as always?!)
I distinctly remember being taught in my Standard Grade Geography that the exclusive reason that Japanese land prices were so high was that they had "no flat land" !
Richard Werners writings on post war Japan, the BOJ and the MOF are absolutely fascinating. Well worth a read.
its about right it wouldnt exist it wasn't for volcanoes and earthquakes on the tectonic plate it sits beside
Lol. When I was eight, my teacher taught the class that the moon changed shape each month because clouds would cover the moon. Another teacher taught us that sound travelled faster than light 😂
In later years I subsequently developed a healthy skepticism to the “facts” contained in textbooks & promulgated by professors, which has made me rather unpopular.
@@craigthebrute2409 Teachers know everything.
Thanks, this is very interesting, it has useful lessons for policy makers
while I agree with the underlying argument, isn't looking at the index value only a bit misleading?
I.e. we're not accounting for dividends. I think.
Or was the TOPIX graph a total return one?
Very interesting insight!
Crazy to also think that they kept their Sales Tax so low for so long until recently as well!
Great video, one of your best.
I wondering if things start to go south when this bubble reaches its climax, whether it would be best to make the cardinal sin of selling rather than holding on as its unlikely to be a v shaped recovery
when is the climax ? thats the point so ride it out if u have enuff years
An impressive video Ramin, with some excellent research. Some fascinating comparisons in there too.
Thank you Graham Ashton. I am glad you enjoyed it.
Great Informative Video, Thanks Ramin
Glad it was helpful!
A difference with Japan is the bankers and others realized they could borrow money cheap and invest in assets outside of outside the country. So inflation of the money supply led to the money leaving and the country rather than inflating the internal stock market. Now with global inflation assets just become the only place to hold wealth without having it inflated away by all central banks. The only question is which assets, how long, and what threshold of interest rates before it comes crashing down.
Awesome video, found your channel last week and i am hooked! Could you do a video on analyzing what fields of the Japanese economy or investing in the market still worked in that time ?
i have been corrected for suggesting our current US asset bubble could be like Japan. i see there are differences but wonder how much of that is influenced by exceptionalism
Hi A G Smith I think a lot of the parallels are interesting, but this is certainly very different overall. I think it always pays to understand what happened in the past as it calibrates our expectations about the future. There's never a perfect analogy from history but there are always useful bits which are comparable. Thanks, Ramin.
Does this mean it’s best to diversify more globally, moving away from heavily weighted UK/UK portfolio??
I think so. But from a US perspective. Best to diversify. I'm comfortable buying good companies nearly anywhere if the price is right.
So we are in the beginning of a stock/housing market boom. Guess it’s time to load up on both for the next 12-24 months
I really like your charts and infographics. Which app do you use for that? Thanks for this very informative channel btw.
Hi Ramin, I liked your presentations. Are you available in person as a resource person for training in Asia?
Please make a video on current Indian economy and current stock market
What a great video Ramin. Very interesting to see all this information, now what to do with it 🤔
Hi @TemptationJewellery thank you! What I took from Japan is not to worry too much about inflation which has consequences in terms of whether bonds are a good idea but also whether to buy inflation linked bonds or nominal government bonds. And also the nature of this bubble is a more productive tech bubble rather than a politically contrived bubble as we saw in Japan in the 1980s. Very few of the companies formed in Japan in that bubble went on to list via IPOs so that's fairly clear evidence that there was a lot of misallocated capital. Thanks, Ramin.
@@Pensioncraft I was also fascinated by the fact that all these companies were interlinked - so when one goes so do the others. I guess, bitcoin aside, that isn't something we need to worry too much about here
Thank you for this informative video.
Thank you for your videos, they are full of fantastic information. Do you have any plans for making a video about UK investments over the next few years now the UK is out of the EU and what you think the future holds for the UK stock market?
Great story.
Wow the history is SO similar.
Thanks as usual highly insightful and alot of factual research behind it - greetings from Singapore.
One suggestion - the chart's fonts are a tad too small when watching from aTV 7+ feet away - perhaps larger fonts for x,y axis and data points ?
could you tell me if the british government has been buying empty shops to stop the commercial property market from going down
The UK govermnent has cut business rates, which is the tax on shops linked to the value of the property. Also it has given out loans to shops/high street businesses or even grants which is giving money to businesses to keep them going.
Given Powell's experience of the 2018 taper tantrum, and the current rhetoric, I don't think they would raise rates even if the Dow went to 50k lol
So do you think this US (and possibly global) bubble will pop soon - say in the next 3-4 months or this year? It could be popped by yield rise or a covid set back. You mentioned the US bubble is differentiated from Japan bubble by money going into innovation companies but isnt everything in a bubble right now...real estate, bonds, equity (growth and value to a certain extent)? even if you argue value companies are not in a bubble, arent there enough similiraties to call this a very high risk bubble similar to Japan bubble. There are even govt intervention and zombie company similarities. If indeed we are in a serious bubble, do you suggest holding on to US equity even though if bubble pops,the prices may take years to come back.
Hi R M not all sectors in the US are equally overvalued e.g. financials, healthcare & utilities have the lowest forward P/E vs their own history. And not every country is overvalued. But the most overvalued companies right now are the growth companies which tend to be centred on disruptive technology which is innovative and contributes to growth. It's just that we're having to pay too much for them they're certainly not all zombies. I wouldn't be comfortable paying these prices for disruptive tech stocks. But if you buy a global index you'll be buying a bit of other countries and sectors which aren't as overvalued. You don't know how long the bubble will continue to exist. It may be that earnings rise to meet valuations gradually without a big selloff (unlikely, but possible) deflating the bubble gradually and if you hold back investment you'll miss out on those gains. You should at least consider that scenario. Thanks, Ramin.
Beautiful presentation.
Thanks a lot
Awesome analysis
Glad you enjoyed it
That was a great video!
Glad you liked it Patrick
Thank you for your lesson. So what is the best investment in times like this ?
Are you a retired professor? very eloquent
what do you think about China Real Estate bubble ?
How bad is it ?
Some indexes (ibex 35, Spain) do not include dividends, while sp500 does
Such a cautionary parable should be painted in blue on a porcelain plate. The rise of long term bond rates recently certainly showed a few sympathetic echoes :-)
Great thanks
You are welcome
Excelent! Thanks Ramin! Talking about inflation, I would like very much a similar video on Hyperinflation in the Weimarer Republik. Any similarities with the current situation? Do you agree with Michael Burry´s recent warnings? Muchos saludos :)))
Good content💫
Thank you Papa 1P4RCY! Ramin.
Canada, Canada, Canada. It's disturbing how similar this is to Canada right now.
Oooh interesting @Iaja82 in what ways is the situation with Canada similar?
@@Pensioncraft an epic, epic housing bubble being prodded on and propped up by the government. The government backs the overwhelming majority of high ratio (7x the median household income. Toronto home prices have tripled since 2006. That might not sound so bad if you don't consider that we have the third highest rate of household indebtedness in the G20 at 177% of disposable income and that was before the pandemic. RE accounts for 46% of our GDP growth since 2018.
We have very low rates and crooked mortgage brokers who can get almost anyone a loan because of lots of private lending. With almost no barriers to entry, the number of RE agents in Ontario where I live has jumped 30% since 2012. Even the agents have FOMO. RE is constantly in the news. The situation fulfills all the criteria of the bubble triangle and it's getting worse. Our Housing Minister Adam Vaughan said the quiet part out loud a few weeks ago: this market is great for foreigners and not so much for Canadians. He won't even tolerate a 10% correction. Mind you, the IMF said we were 54% overvalued back in 2019.
As for overstimulating. The pandemic stimulus was oversized. It's estimated that we lost $53B of income but the income support given was $71B.
I first realized that something was desperately wrong when I was looking to buy in 2017. FYI, I work in tech, have an MBA and 14 years of experience. My income was in the 90th percentile then and is in the 95th percentile now and I'm priced out by my standards. I have no debt so banks will give me a mortgage of ~$600K but at 1.7% interest I know the principal would ruin me financially when rates normalize. We have 5 year mortgage terms here amortized over 25 years. I might be cutting it close for the first term but I couldn't stomach 4% at that kind of principal. There is a mortgage stress test but there are ways around it.
I'll log onto the Patreon Slack to request a video on Canada's RE market. We are staring down the barrel of a 12 gauge pump shotgun financial crisis.
Thank you.
You're welcome!
US is in same path as Japan. Low interest rate and high asset price. Technology revolution fueled the stock mkt but real estate is going up rapidly.
Hi Ramin can we see where you have invested for this year please?
Hi Mark I haven't changed anything. Thanks, Ramin.
@@Pensioncraft Meant to say Hi! Predictive text! Haha. I see the "Global Minimum Volatility Factor" is no longer available. Is there a good alternative? Thank you Ramin
Hi Ramin - another excellent video. I have often wondered what happened to Japan and what caused the bubble
It is significant that land values and the credit associated with land was a major factor in the creation and then deflation of the equity market.
Phil Anderson has written a book about the long term cycle (18.5 years) of the equity and property market - and the main thesis is that the credit created by rising land prices follows a predictable pattern of boom and bust - worth a read, if you have not already read it
What a video, great! Do you think the recent market ''dip'' is just a short lived thing and will people be back to buying speculative stocks & bitcoin in no time, or is this finally the start of the big correction? What do you think Ramin?
I think the bonds are the biggest part of the bubble. Historically overpriced. They seem the source of danger.
I know you kept saying Japan.
But i kept hearing "UK"
8-)
Nice video!! Very engaging from beginning to end. Nevertheless, businesses and investment are the easiest way to make money irrespective of which party makes it to the oval office.
Incredibly well done. Have you had direct experience in japan?
Thank you for watching
Great video!! Thank you
Glad you liked it!
how could/should the FED increase interest rates within our lifetimes ever again when US debt is at "over the top of over the top"-levels?
interest payments alone would lead to certain state bankruptcy.
Congress could zero out the Fed’s balance sheet which would “magically” get rid of a lot of that debt. Whether that’s right or wrong is irrelevant. Same as when a country devalues its currency. It’s bound to happen.
Perhaps by raising taxes but it's a tricky ground.
If Fed did not rise interest rate (we all know they will keep rate low for long periods of time until Cp-lie up more then 2 % for a period of time) then we will not see a stock crash in our life time? Because by your research this will not cause real CPI to go up so no any concerns to rise interest rate?
Have you read 'The Princes of the Yen'? It seems to place all the blame on the central bank and its rivalry with the finance ministry.
The central bank basically saw the plaza accords as an opportunity to grab power and end the role of the finance ministry to direct lending and thus shape the economy.
The outcome (massive inflation followed by years of deflation) is the worst example of a central bank failure you can find, it also shows that central banks always win because it doesn't matter how bad the economy does, they never get any extra oversight or have any of their power removed.
Excellent video!
Thank you very much!
SPAC... wow
Do you reckon we will something similar with the stock market today?
I would love to have your view on what I call the Moroccan paradigm.
Is this a good time to buy VUTY OR VGOV bond?
Need a serious Advise
Thanks
If interest rates are going to pop the bubble why should the Fed increase interest rate, can they keep it low for a very long time like UK did for the past decade ??
I made £700 from a personal Yen account during the 90's. Only because charges were dropped because I worked for one of our big four.
Could you PLEASE be our Prime Minister after Boris ? 🙏🏽
Hi Carlos that's kind of you but I'd rather saw off my own leg. Thanks, Ramin.
Whenever a chart is not shown I keep trying to clean off the smudge on the right of my screen.
Hi Joseph sorry about that it's a doorstop on the wall. Thanks, Ramin.
why did foreign investors share of trading go from 11.5 to 34.4 in Japan between 1991-1997?
One major difference between the US today, and Japan in the 80s (and the century & a half prior to the 90s), is that Japan was steadily & rapidly increasing in economic freedom (good for commerce) and Japan 🇯🇵 was producing tremendously & exporting Japanese products all round the world.
The US is sadly no longer producing!
Us is still producing, just not goods, but services. Google, Facebook, Amazon are inevitable in people’s lives now.
Great video. But I’m sure Toshiba is not a car company!
Thank you I am glad you enjoyed the video
So in a nutshell, swings and roundabouts?
In a nutshell, it's all fun and games until interest rates go up.
why does a rise in interest rate cause an issue? i understand credit becomes more expensive to pay back but don't understand why it affects the value of land? sorry a bit of a novice question
Hi kavit a lot of land & real estate is bought using credit and as credit becomes more expensive (as rates rise) the cost of financing increases and land & real estate become less affordable. Lending multiples are also important and tend to fall during a period of low economic growth, as happened in Japan following the bubble popping in the early 1990s. Thanks, Ramin.
@@Pensioncraft brilliant thank you... your channel is revelation
Thank you @@nathwak! Ramin.
I think Japan gov. now owns 60% of their stock market
Ah, a “finance” video from someone who’s actually invested in a bear market or two
Agree! More time needs to be devoted to discussing and better understanding risks.
Not this time my dear friend. We are living in different times with nothing but a bright future ahead of us. Long the /es :)! We are in the mist of the greatest bull market to exist.
great vid
Thank you
The assertion that wealth has been created as measured by the rise in asset values is illogical. Has there been a significant expansion in tangible goods produced (and capital goods, in particular)? Not really. What we have experienced is a huge speculation-driven asset inflation. Actual capital goods do not appreciate over time; they depreciate. Real tax reform requires that so-called capital gains be treated as ordinary income and taxed at the same rate schedule as wages, salaries and other "ordinary" income. It would be system changing if the federal government combined simplification of compliance with real progressivity, a progressivity that captures much more income DERIVED from speculation in financial instruments and from rent-seeking privileges under existing law. What might this look like? Exempt all individual incomes up to the national median. Eliminate all other exemptions and deductions. Above the exempt level, impose an increasing rate of taxation on higher ranges of income. The rates and ranges would be determined in conjunction with the federal budgeting process.