With the economic downturn, pessimism is increasingly shrouded, and more and more people begin to like to compare the current situation with Japan in the nineties, often saying that one bear in Japan is 30 years, and it is difficult to end the bear market under the economic situation, so don't expect any bull market.
The reason why everyone wants to take Japan as an example, in addition to the fact that China and Japan have certain similarities in population density and cultural Xi, is mainly because the Japanese bear market is an extreme case in the capital market, which can be said to be the longest bear market since the birth of **. Similarly, the extreme bear market in the United States, the Great Depression of 1929, took only 26 years from the crash to break through the previous highs in 1955, while the Japanese bear market has been 33 years since 1990 and into 2023, but it still has not broken through the 1990 highs. Therefore, we often say that Japan has lost 30 years, and now comparing itself with such an extreme case is itself a manifestation of deep despair.
Of course, people's fears are not entirely groundless, looking back at history, one of the important reasons why Japan has fallen into a long-term bear market is the continued economic downturn (the other is the huge bubble accumulated by the previous 40 years of bull market), Japan's per capita GDP has exceeded the US dollar mark in 1992, but it is still only 3 in 2022$380,000 (comparable after adjusting for inflation), an extremely slow increase. On the other hand, China is actually facing the same problem, with economic growth slowing down year by year, and hidden dangers such as the aging of the population and the bursting of the property bubble that Japan has encountered are also emerging one by one, and it is indeed difficult to be optimistic.
However, despite this, everyone's perception of Japan's bear market is mostly biased, the so-called bear 30 years is just a bear market in a broad sense, just like A shares since 2007 after seeing 6124 points, in up to 16 years have not refreshed a new height, can also be called a bear 16 years, but in these 16 years not every day is a bear market, at least -2020 has been out of a good ***
The same is true for Japan**, first of all, if you take 2012 as a watershed, the Nikkei 225 index from 2012 to 2023 has actually walked out of a wave of standard bull market for 11 years. Secondly, even in 1990-2008, when the waves were at its darkest, the Nikkei 225 index still had three good years, namely -1996, when the Nikkei 225 index went from 141944 o'clock ** to 227507 points, up - 2000, Nikkei 225 from 127879 o'clock ** to 2083321 points, an increase - in 2007, the Nikkei 225 index from 760376 points** to 1830039 points, an increase of 14068%。
The above three periods of ** lasted for a long time, and can basically be regarded as three proper small bull markets**, which occupy a total of almost a year, that is to say, in the real sense of the 18-year bear market, there are ** years.
Looking back, let's compare A-shares, from 1990 to 2007, China's economy developed rapidly, and the Shanghai Composite Index rose from 100 points to 6124 points, an increase of 60 times in 17 years, which can be described as a standard super bull market, which can fully correspond to the bull market before the peak of Japan's economy in the 90s. After GDP growth peaked in 2007, A-shares began to fall into a long-term bear market, similar to what happened after Japan's bubble peaked in 1990. There's an old saying on Wall Street that when everyone feels like they're in a deep bear market, it's actually coming to an end.
In fact, in the 30 years that Japan has lost, there have only been 18 years of real bear market, and we have actually gone through 16 years now, so we really don't need to continue to be so pessimistic. What happened in Japan after 2012 also tells us that even if the economic growth rate is not high, the appropriate progress under low valuations can still brew a big bull market**.
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