Let’s talk less rigorously about how Soros went long on Japanese stocks and short on the Japanese yen.

Before, we took a less rigorous look at how Soros attacked the Thai baht. Although shorting a country's currency will bring economic turmoil to the country and trigger a series of social problems such as soaring unemployment, worthless money, and people's distrust of the government, if we only look at it from the perspective of investment income, Soros Still awesome. After all, speculation requires not only heartbeat, but also courage and courage.

In the final analysis, value investing led by Buffett and hedging speculation led by Soros are both investment methods. Investment methods vary from person to person, and we cannot definitely say who is smarter and who has no conscience. After all, Soros is not invincible. He suffered losses in Hong Kong, China. In the final analysis, there is still something wrong with our own system, which will have to be changed sooner or later. Speculators led by Soros are just following the trend, although for some countries, this pain is a bit confusing.

Okay, let’s get down to business.

Today we also hold the same less rigorous attitude and take a look at how Soros goes long on Japanese stocks while shorting the yen.

First, let’s look at two terms:

Quantitative easing:

A less rigorous but easy-to-understand understanding is: printing more money.

Abenomics:

A less rigorous but easy-to-understand understanding is: using both soft and hard measures, requiring the Bank of Japan to print more money.

Then, let’s look at a historical background:

On March 11, 2011, a major earthquake occurred in Japan, and a nuclear leak occurred at the Fukushima Daiichi Nuclear Power Plant.

Here comes the fun part:

Generally speaking, when a disaster occurs in a country, it will severely damage the country's economy, and its currency will depreciate rapidly accordingly, but the Japanese yen is very What’s weird is that instead of falling, it has rapidly appreciated in value. Some people think that Japan's overseas funds are returning to rescue the market, but this statement is denied by the official. The official reply is:

The influx of a large number of speculative orders has prompted the appreciation of the yen.

Then this brings about a problem: exports are sluggish.

After all, in today's era of economic globalization, a country still has to make money by selling things to another country. Since it is a transaction between two countries, it must involve the issue of unified currency transactions. But the problem now is that the exchange rate of the yen is so high. If there are substitutable goods (there certainly are), which country is willing to do business with Japan?

So, after Abe came to power, he must of course fulfill his campaign promise - to depreciate the yen and stimulate exports.

(To put it bluntly: Treating the symptoms but not the root cause - it doesn’t help)

If the government has this attitude, what will the smart speculators do?

Self-explanatory.

However, the Japanese are not stupid. After all, there are so many outstanding economists among them, right? If Soros were to short the Japanese yen in such a big way as he was when he targeted the Thai baht, it would definitely attract the attention of relevant Japanese departments. After all, there are lessons learned from the past.

Soros is Soros after all. Although my ultimate goal is to go short, I don’t go short directly and crudely. I go short in a roundabout way. For example: buy financial derivatives that are bearish on the depreciation of the yen (if you don’t understand the concept, turn left and go to Baidu by yourself). For example: the most well-known one - long Japanese stocks.

Yesterday we learned what "short selling" is, but what is "going long"?

A less rigorous but easy-to-understand understanding of "going long" is: be optimistic about the stock market, buy at low prices and sell at high prices.

As the saying goes, if the path is higher, the devil is higher (although I don’t think Soros is a "devil", at most, he is more effective if he takes the wrong approach), if you only consider investment strategies (not Considering the negative impact on the country's national economy, etc.), I personally prefer Soros's battlefield in Japan.

Let’s make a summary:

First of all, even the government wants the yen to depreciate, which reduces a lot of resistance for Soros. Secondly, after all, there are lessons learned from the past. The relevant Japanese departments will definitely be wary of speculators shorting the yen, but it doesn't matter. Soros used roundabout tactics and allocated financial derivatives that were bearish on the yen. Finally, short the Japanese yen and long Japanese stocks, both sides will benefit.

`Pictures come from the Internet