Transcript of video:

Some companies that run funds holding Japanese Equities have been suggesting that now is the time to buy. We don’t think so and if you have a look at our recent article it gives you the reasons why.

So Japan has been a basket case economy for the best part of a quarter of a century. It peaked in the latter part of 1989 and it’s had deflation for 25 years. Nominal GDP is lower today than it was in the mid-nineties. It’s got an ageing population and it’s going to get older. By 2050, 43% of the population will be aged over 60 and only about 45% will be in working age. So work that out – lots and lots of young Japanese supporting lots and lots of old Japanese. Net migration is virtually non-existent in Japan – people tend not to migrate and go and work over there, so where is the new population going to come from? And through all this period the Japanese population is going to decline from just over 120 million down to around 80 million by the turn of the next century.

Anyway that is not good news for Japanese businesses and they’ve been floundering big time. Who these days says “Hello Tosh got a Toshiba”? No, you say “Hello Len got a Lenovo” or “Hello Dave got a Dell”. Because Chinese companies and American companies (Apple) are dominating the electronics markets these days. Japan has been chased out and they’ve been chased out because their domestic economy has been protected for years and years and years and it is wholly uncompetitive. It’s not going to change over-night. We see no point to be investing in there so we will not. Apart from some indirect exposure we are staying well away from the land of the rising sun.

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