Japanese Bear Market Analysis

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Investors often believe that in the long run, stocks will definitely give them good returns. Even when their portfolio loses net worth by 50-60% they tend to carry the hope that in the long term there will be profits. However, in reality that does not turn to be true. Patience is crucial in the stock markets, but it does not guarantee success. This article will explore how bear markets can last for decades. 20 years is what the Japanese bear market lasted. The story of how it began was much like a dream and how it ended was nothing short of a nightmare. After the World War II, Japan was completely devastated. The major cities lost their existence and there little existence of something called economy. In this situation the Japanese people…show more content…
With this surplus money in banks Japan ran a large trade surplus. The Japanese currency, the yen appreciated against foreign currencies. This benefited the local companies as they could invest much more easily than their global competitors. This reduced the price of Japanese-made goods and widened the trade surplus further. The United States government too provided useful help as the Marshall Plan helped Japan to rebuild and provided capital and military protection as well. Japan began to see quick growth of factories. The factory workers were offered lifetime employment so that they would remain loyal to their employers. The Zaibatsu concept was perhaps the biggest factor in this direction. A Zaibatsu was a conglomerate of several industrial and banking companies. They had a competitive edge as they were involved in copying and improving Western products and export them back to the West for lower prices. This provided them a competitive advantage to the companies of the West due to the cost factor. Very soon these Zaibatsu conglomerates were further integrated to form even larger business conglomerates called Keiretsu. With this concept the constituent units of the Keiretsu worked through cooperation where the business and government facets worked hand-in-hand. This brought greater prosperity to the Japanese…show more content…
Japanese car makers like Honda and Datsun (now called Nissan) however, began to take the market in its favor by mobilizing to small fuel-efficient cars. After the introduction of use, the assembly - line robot car manufacturing in Japan began seeing further increase in production rate. It did away with the concept of human errors in the manufacturing process. This took the flourishing automobile industry of America to Japan and the trend continued in many years that were to follow. In years to come Japan entered the world of electronics and here too it brought in a revolution. Japanese Keiretsu corporations such as Hitachi and Sony copied and produced quality electronic hardware which was facing high demand because of the growing global computer industry. Japan had the advantage of cheap labor, which enabled it to take on the American companies head on. By the late 1980s, Japan was one of the best destinations in the world. The Japanese people had one of the highest standards of life in the world and also had the world’s longest life

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