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I’ve been pleasantly surprised that some of my most popular posts are excerpts from the only history book I ever wrote, Panic, Prosperity, and Progress. Over this holiday weekend, I’ll be sharing, over the course of four days, the chapter dedicated to the inflation and bursting of the Japanese bubble of the 1980s. I think you’ll find some interesting parallels with China. You can read the first part here.
In the early 1950s, Japan focused on what it called “priority production”, which meant a focus on basics such as coal mining, steel production, and shipbuilding. It was creating a solid foundation for the widespread industrialization that would come years later, and it helped move the country away from its former focus on farming. In the modern world, becoming proficient at industries such as steel would be more valuable than another marginal increase in rice output.
I’ve been pleasantly surprised that some of my most popular posts are excerpts from the only history book I ever wrote, Panic, Prosperity, and Progress. Over this holiday weekend, I’ll be sharing, over the course of four days, the chapter dedicated to the inflation and bursting of the Japanese bubble of the 1980s. I think you’ll find some interesting parallels with China.
As the summer came to a close in 1945, Japan lay in ruins. It had spent the past five years at war, and the nation had been assaulted by an unrelenting fire-bombing campaign, climaxed, of course, by the only two nuclear weapons ever dropped on humans in world history. Japan, once with dreams of Pacific-wide domination, was now one of the poorest and most-devastated nations on Earth.
When I was a little kid and got what I considered a bad grade (let’s say a B+) at school, I would sheepishly come home and start to tell my mom. She could tell I had disappointing news, and she would invariably ask me, “Was it a C? A D? An F?” Hearing her offer some low expectations was a relief for me, and it made me easier to tell her, “I got a B+”, and she would tell me it wasn’t so bad, and we would talk about it. For a little boy, it was a weight off his shoulders. And she did it that way every time.
I suppose, or at least I hope, it was her way of making it easier for me to tell her the news. Thus, in a strange way, telling her something bad was magically transformed into what I felt was actually pretty good news. Hearing her suggest that I might be reporting an “F” but instead giving her a “B+” made me feel good again. It was a curious, but clever, psychological trick.
Both this Monday (that is, today) and last Monday had, for me, some singular and very nasty losses. I wanted to share the story of each of them, since the contrast between what led to those losses is worth noting. In short, one of them was a royal screw-up on my part, and the other was just plain bad luck. Let’s review, and in doing so, we’re going to look at the Friday preceding each of the aforementioned Mondays.
A couple of Fridays ago, the market was falling to pieces, thanks to the Corona virus scare. All my positions were doing great, and I was just about fully committed with respect to buying power. Egged on by this success, I decided to get cute and put the last of my buying power into some weekly SPY put options.
Big news! One of the most oft-requested features in SlopeChartsis, at long, long last, finally here: the ability to draw directly onto indicators. And it isn’t just trendlines. We’ve given you the ability to add any drawn object to any indicator.
I had an interesting little experience the other day which reminded me of a post I wrote a decade ago.
Here in my beloved home of Palo Alto, we’ve got a shopping center that has been around for decades called Town & Country. I had to run an errand down there, so I had to make a quick decision whether to take the Tesla or just pile all my dogs into my other (not-as-nice) car. The dogs were eager for a drive, so I decided to slum it and take the non-Tesla instead.
I arrived at the shopping center, parked, ran my errand, and got back to my car. I put it in reverse and started backing out.
It seems to me that for every one owner of a Tesla electric car, there are about 2,000 “investors” who trade the thing. This reached a new apex of absurdity a few days ago when a little-known research firm trotted out a target price for TSLA at, conveniently, a trillion dollar market cap. The intended result played out as you might expect.