Commentary ·

What the Japanese bubble taught me

If our flawed DNA is the reason that we fail to learn from past bubbles, then it is critical to fight our DNA to avoid getting sucked into the crowd.

THE Japanese economic miracle hit its zenith in 1989. A period of sustained economic prosperity, and strong corporate profits led to a buoyant property market, a spirited stock market, and countless crazy stuff.

During a business trip to Geneva, once my cab driver learnt I was a fund manager from Tokyo, he praised endlessly the land of Toyotas, JVCs, Nissans, and Sonys. He then asked my view on the warrant of a small Japanese diesel engine manufacturer that he had just bought.

In 1988, I was invited to a "US$10,000 evening". Brokers at that time made so much money that this extravagance was not even worth a thought. As it was not possible to even spend 10 per cent of the budget on delectable Kobe...


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