When I was a kid there was the story of the little engine that would not quit. Its name was Puff and Toot. The character had one goal and that was to make sure the children could get to camp. When the main tracks were blocked Puff and Toot found a way to get over the mountain to insure the kids summer camp.
Puff and Toot is a tale of persistence. If we keep working hard and pull our resources together we can succeed. In modern economies Puff and Toot would be the Japanese business model.
Rising from the ashes of WWII Japan’s economy became the model and envy of every country in the world. Their business mold of rewarding loyalty and hard work became the Gold standard of modern manufacturing. Keep your citizens employed, treat them fairly and your coffers would fill.
Above all keep your jobs at home and export your products.
The model worked for more than fifty years with some small hiccups along the way, but on Wednesday the Bank of Japan made an announcement that startled many casual observers, but not professional economists. They are going to run a trade deficit for the first time in over thirty years. Japan is suffering from the same mêlées that affects all maturing economies; the cost of labor is cheaper overseas.
Many reasons are given, the strong Yen ¥, the Earthquake and Tsunami, too many pensioners, but the real reason is that their competitive edge has been lost.
Will Japan be able to reorganize and rise to the top again?
Is it time to bail on Japan or is this an opportunity?
I believe that only time can answer these questions, but I know of a couple of things that will work in any market environment.
Discipline and reaction are the keys.
Reacting will create opportunity. Recognizing opportunity and the discipline to take advantage of it is my specialty. That is what produces winning trades.
I teach my students discipline and how to make it work for them in any type of market condition. I can teach you too.
To learn firsthand how I would trade a market with a trade deficit, speak to one of my representatives and sign up to work one-on-one with me here:
http://averagejoeoptions.com/qual/
As Always,
Keep those stops tight.
Todd “Bubba” Horwitz
P.S. We run the fastest growing online options community. With weekly webinars and a very energetic forum, my team and I are always looking for great risk/reward opportunities. Click on the link below and become a member of my community today.
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