Email of the day (1)
Comment of the Day

March 18 2011

Commentary by David Fuller

Email of the day (1)

On experiencing Japan's earthquake from the 20th floor:
"I'm one of your subscribers in Japan. An ex-pat Brit living in Tokyo I was in our 20th floor flat near Tokyo Bay when the earthquake struck. The building swayed repeatedly but as intended and there has been no major structural damage. Chalk that up to Japanese anti-earthquake construction technology. Once I was able to stand up and look in the rooms I found the damage was limited to smashed glasses and crockery. Nothing compared with the horror that had just befallen the people of Tohoku. During the following days the tragedy has been compounded by the nuclear accident at Fukushima.

"The scaremongering and ill-informed reporting, particularly from overseas media and the internet have led to a slow motion panic by many gaijin (foreigners) who have in the past week been heading for the exits. This was spurred on by several countries unnecessarily advising citizens to leave Tokyo. It was a relief, therefore, to read the sober, clear analysis by Dr. Josef Oehmen that you posted and which explained precisely why this will not be a repeat of Chernobyl. It helped calm our nerves enough not to join the irrational stampede and made me realize once again what a valuable service you provide. It's not just articles like this. I have been a subscriber for many years and during that time your calm, logical analysis of the facts during even the most traumatic of times I believe has helped instil in me some degree of discipline so that I know to try to keep emotion in check when making important decisions.

"But for courage and stoicism what a remarkable example the people of Tohoku have exhibited in their agony. So selfless, uncomplaining and dignified.

"Truly inspirational, don't you think?"

David Fuller's view Thank you so much for your kind words, and for sharing your personal experience and observations. I saw film footage of skyscrapers swaying in Tokyo and that must have been a very unnerving experience at the time, fortunately with a gratifying conclusion. As a visiting gaijin in the late 1980s, while enjoying the comforts of my room on a similarly high floor, I remember the thoughtful English language note on the bedside table, reassuring me that the hotel had been built to withstand an earthquake of 10 on the Richter scale. I remember just hoping that my nerve would not be tested by even a small earthquake.

Regarding Dr Josef Oehmen's analysis, which unusually had been sent to me by several subscribers, it was technically reassuring but he was also overly optimistic regarding containment of the Fukushima crisis, as we now know. This has moved from an INNES Level 4 Accident to Level 6 (of 7), and should remain below Chernobyl's 7, according to specialist reports that I have seen.

Fukushima remains frightening enough and I do think that some of the press went way beyond objective reporting, fanning hysteria in the interests of selling newspapers and promoting websites. As investors, we know that people extrapolate scenarios, so with any crisis a worst-case scenario is soon discussed, however improbable - think October 2008 to March 2009. Governments are under pressure to address this hysteria - just in case it is justified - so there is often a degree of butt protecting in any advice provided.

Staying calm, objective and analytical rather than emotional in the face of pressure is not easy but it can be learned. In markets, I've had lots of practice because this industry lurches from one 'crisis' to another. Most are minor problems, some serious and all will be exaggerated before they eventually dissipate.

Since we know this in advance it can be helpful to remember the apt adage: 'If you are going to panic, panic early.' A Fullermoney variation on this is that we would prefer to commence selling when the crowd is euphoric, and to buy when the crowd is panicking.

I have long admired the ancient Asian cultures for their best achievements, not least in the arts. And yes, one can only be impressed by the courage and stoicism shown by the people of Tohoku in response to a devastating crisis. My favourite example among so many was of the 70 year old woman, discovered barely alive in her wrecked and freezing cold car, who after being carried to a shelter, struggled to her feet and bowed to her rescuers.

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