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March 31, 1999

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Subject: Re: Speaking of Japanese Online Trading...
Author: ksuzuki

Adam wrote: "1. How come you didn't invest in Softbank? Is there something about Japanese stocks you don't like?

2. How come you think the fate that befell the Japanese markets in the 80s-90s won't befall the U.S. markets soon?"
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All righty. I'll answer your questions, but I warn you that I'm not a financial expert...I'm just a med student...darn it!

Yes, I had been living in Tokyo to witness the bubble forming in the 80's to the bubble bursting in the 90's. It was crazy to say the least...new buildings popping up on every corner of the city...the land prices in Tokyo inflating so fast, creating thousands of over-night millionares...some entrepreneurs in their 20's driving Mercedes around Shibuya...there were so much Japanese money pouring in Hawaii, we called it "the new 14th district of Tokyo metropolis"...

IMHO, there are a lot of difference between the Nikkei inflation back then and the U.S. stock market now. First of all, we didnot have the internet, the Motley Fool, or deep discount brokers. As far as I know, we (Japanese) are big on "savings account" (and not so eager in individual investing) & our savings rate is quite high compared to other industrial countries, while it is close to zero in this country.

I truely believe that the 80's bubble in Japan was big "keiretsu" companies/financial institutions driven, being fueled by the corruption of the financial institutions from the top to the bottom (starting from the Ministry of Finance to small local banks).

I'm pretty bullish & confident about the U.S. market because: (1). the informational revolution of the internet, (2). tech-driven market economics, (3). relatively regulation-free economy, (4). well-educated individual investors...etc.

...oh, boy. I've got to admit, I'm totally talking out of thin air here in between my classes. I promise I'll write a better post when I have enough time to research & get my numbers to back up my writing.

To answer Adam's Qs:

(1). Soft Bank is an insanely great company. It's proven. I tell all my friends in Japan about it (but, like I said, the term "individual investing" is still pretty exotic there). I just bought CMGI instead because it's so much easier to track than logging on to www.yahoo.co.jp every morning to check where the JPN economy is heading.

I tell you this much: the Japanese economy is recovering! I saw early signs all over it when I was there in January '99...at this moment, they are investing a lot of Yen in the infrastructures around Tokyo & Osaka etc...The highway & the train systems are incredible there...and the JPN stocks are so cheap!!!

I may actually buy SFTBF anytime this year, but there are enough insanely great companies here to give me a good headache!

(2). I kinda answered this questions, but I see lots of difference between now & then...and I think the consumer-driven U.S. economy is pretty healthy compared what we had.

I can also predict what we have now in the U.S. (the spread of internet companies & the surge in individual investing) will happen once again in Japan pretty soon. That is when we should invest in the Japanese stock market.

...wow, I got to get to the clinic, but feel free to add/criticize...but you have been warned!

Kazu.