Low Expectations
The Morgan Housel Podcast
00:00
Nikkei's Front-Loaded Returns
- The Nikkei's recent high masks 33 years of stagnation, a stark contrast to its extraordinary returns from 1965 to 1990.
- While the Nikkei and S&P 500 show comparable returns over the past 60 years, the Nikkei's gains were concentrated in a single 25-year period.
- This front-loading created inflated expectations in 1990, acting as an invisible debt that took decades to repay.
- From 1965 to 1990 the Nikkei did ~14% per year but since then has returned ~0%.
- The S&P has been much more even keel: ~5% per year in first period, ~8% since.
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