JP Morgan’s CEO Jamie Dimon warns of the most dangerous time in decades recently. There is certainly a lot on the plate for investors these days. Another fund report caught my attention while I was plotting some charts for a webinar on the markets later today. This fund has a long-term bullish position on Uranium and Japan in addition to short themes focused on the luxury goods sector and the electric vehicle supply chain.
Here is a section:
The Lollapalooza effect is a phrase that was coined by Charlie Munger to describe a situation where multiple forces or factors are moving in the same direction. Each force or factor bonds together, reinforcing one another to generate an explosive impact that yields significant results.
What we have just described is the unique opportunity we see brewing in Japan, with a confluence of factors supporting potentially outsized returns for equity investors (and more importantly for long/short investors such as ourselves, an outsized opportunity set). Japan is in a unique position to benefit from rising geopolitical tensions, as companies seek to diversify supply chains. Japanese corporates are beginning to embrace Western business practices, driving higher profitability and returns on equity.
The return of inflation is buoying domestic Japanese consumers, emboldening demands from wage rises as labour markets in Japan have reached their limit, due to structural demographic issues. The continuation of accommodative monetary policy is supporting corporate profitability given the high proportion of exporting firms … quite frankly, the list goes on. The investment landscape we are evolving into, is one that looks to be drastically different from the past and a lot of the factors which have changed are incredibly supportive for corporate Japan.