Not Turning Japanese

- Bear Markets — "Japanese equities are still down 69% from their December 1989 peak. World ex-Japan equities are down 29% since their March 2000 peak."
- Is this Japan? — "Many investors remain concerned that the Japanese experience for two lost decades will be repeated in other developed markets. Stagnant economies could produce a second decade of negative equity returns."
- A Repeat Unlikely — "The 20-year Japanese bear market reflects the impact of a de-rating, weak economic growth, poor earnings, and shareholder dilution. We do not expect any of these to be repeated from here for other major developed markets."
- Focus On Dilution — "Much of the drop in Japanese equities since the initial 1990-92 de-rating can be attributed to EPS dilution. A focus on shareholder returns elsewhere should make similar mistakes unlikely."
- De-Equitisation Needed — "We screen for global companies that have looked to enhance EPS through share buybacks. US IT companies feature strongly."
Citigroup Global Equity Strategist 20100721