Fusion Blog had an excellent interview with Felix Zulauf that is a must read.  In the interview, Zulauf outlines his bullish take on equity markets in China and Japan.   Readers of my daily posts will recognize this bullish China/Japan theme as it has been recurring over the recent past.

Some reasons for Zulauf’s bullishness include:

  • A desire by the new Chinese government to maintain 7-8% annual growth by any means necessary;
  • An insistence from the Japanese government that the Bank of Japan undergo massive money printing or else;
  • A Japanese currency decline that will lift equity prices, especially given the fact that they’re not owned–market caps are one quarter of what they were 23 years ago;

Zulauf thinks that Europe will have a “honeymoon” period for the initial months in 2013, but then “markets will begin to realize that the improving fundamentals they have discounted will not be there and markets will react negatively. It’s hard to pinpoint exactly when this occurs. My best guess is sometime in mid-2013 or even 2014.”

Read the full interview here:  Interview with Felix Zulauf

 

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