Michael Lindsell: What we're expecting from Japanese equities this year

Holdings will need to "plough through their own furrow"

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 Michael Lindsell, manager of the Lindsell Train Japanese Equity fund
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Michael Lindsell, manager of the Lindsell Train Japanese Equity fund

Now that we are just a couple of days into the New Year, it is interesting to reflect on Japanese markets in 2018.

The Japanese market peaked in mid-January and, one way or another, has been declining ever since. Now it is 21% below its peak in January. Looking at what has driven it down suggests investors anticipate cyclical earnings will be hit. The ten worst-performing sectors, all down between 31% and 43% from the 19 January to 21 December, include shipping, machinery, commodity cyclicals and electronics; all sectors that typically feature at the forefront of any earnings recession. Joining them also were banks and securities companies. Why investors need to look through Japan's macro deterrents ...

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