Japan’s record ¥122.3 trillion budget passed on 7 April. Domestic media are busy picking ‘Takaichi stocks’ in defence and semiconductors. But the financial statements of the supposed beneficiaries tell a different story – and the budget’s largest single outflow goes not to growth investment but to debt service, enriching the banks and life insurers who underwrite it.
For over a decade, the default recommendation for retail investors worldwide has been simple: buy a global index fund and forget about it. The MSCI All Country World Index, or its close cousin, the S&P 500, became the intellectual path of least resistance. And for a long time, it worked beautifully. But the conditions that powered that trade are shifting. I believe we are entering a period where Japanese equities will meaningfully outperform global indices. The argument is not a short-term tactical call. It is a structural argument built on five mutually reinforcing pillars. ...