JК
Dogs and Demons :: Керр Алекс
Страница: 57 из 270The financial system was designed to enrich Japan's manufacturing companies by providing cheap capital, and in this it succeeded spectacularly well for thirty years. Money from savings flowed to the big manufacturers at very low rates-in the late 1980s, the cost of capital in Japan was about 0.5 percent. (In contrast, American and European companies paid rates ranging from 5 percent at the lowest to more than 20 percent.) And while in other countries investors and savers expected returns and dividends, in Japan they did not.
In the West, financial gurus sometimes lament that Wall Street holds corporate earnings captive to shortsighted demands for profit, whereas in Japan, rather than paying dividends to greedy stockholders, companies retain most of their earnings and pour them back into capital investment. Even though they didn't pay dividends, stocks kept climbing throughout the 1970s and 1980s. Thus arose the myth that stocks in Japan were different from those in other countries: they would always rise. When in 1990 Morgan Stanley began issuing an advisory that included warnings of which stocks to sell, MOF viewed this as an ethical lapse out of tune with the moral tradition of the Japanese stock market.
Concentrating only on the benefits to companies that need not pay dividends leaves out several important factors. We all know there are various standard ways to value stock. Most important of these is the price-to-earnings ratio (P/E ratio), which tells you what percent of your investment you can expect a company to make as earnings. A P/E ratio of 20 means that in one year the company will earn one-twentieth, or 5 percent, of the price of the stock, some or all of which it will pay out to you, the shareholder, in the form of dividends. These dividends will be your basic return on investment.
Calculating the true value of a stock gets complicated if you expect the company's earnings to grow dramatically in the future-which is why investors have snapped up Internet stocks in America even though many dot-coms have never made profits and have even suffered losses. But the general principle still applies; that is, the investor expects to be paid dividends, now or in the future, on earnings.
This has not been true in Japan, where the accepted wisdom held that stocks needn't pay out earnings; before the Bubble burst, P/E ratios reached levels undreamed of elsewhere in the world. The Dow Jones average, at its most inflated in early 2000, averaged P/E ratios of about 30, at which point analysts screamed that it was overheated. In contrast, average P/E ratios in depressed Japan reached 106.5 in 1999, more than three times the American level. A P/E ratio of 106.
In the West, financial gurus sometimes lament that Wall Street holds corporate earnings captive to shortsighted demands for profit, whereas in Japan, rather than paying dividends to greedy stockholders, companies retain most of their earnings and pour them back into capital investment. Even though they didn't pay dividends, stocks kept climbing throughout the 1970s and 1980s. Thus arose the myth that stocks in Japan were different from those in other countries: they would always rise. When in 1990 Morgan Stanley began issuing an advisory that included warnings of which stocks to sell, MOF viewed this as an ethical lapse out of tune with the moral tradition of the Japanese stock market.
Concentrating only on the benefits to companies that need not pay dividends leaves out several important factors. We all know there are various standard ways to value stock. Most important of these is the price-to-earnings ratio (P/E ratio), which tells you what percent of your investment you can expect a company to make as earnings. A P/E ratio of 20 means that in one year the company will earn one-twentieth, or 5 percent, of the price of the stock, some or all of which it will pay out to you, the shareholder, in the form of dividends. These dividends will be your basic return on investment.
Calculating the true value of a stock gets complicated if you expect the company's earnings to grow dramatically in the future-which is why investors have snapped up Internet stocks in America even though many dot-coms have never made profits and have even suffered losses. But the general principle still applies; that is, the investor expects to be paid dividends, now or in the future, on earnings.
This has not been true in Japan, where the accepted wisdom held that stocks needn't pay out earnings; before the Bubble burst, P/E ratios reached levels undreamed of elsewhere in the world. The Dow Jones average, at its most inflated in early 2000, averaged P/E ratios of about 30, at which point analysts screamed that it was overheated. In contrast, average P/E ratios in depressed Japan reached 106.5 in 1999, more than three times the American level. A P/E ratio of 106.