"Thank you for your thoughtful reply to my email on Topix bank performance yesterday. Your answer made me re-examine my question, and I have come to new and different conclusions, which I wanted to share with you and the collective. Life is indeed a learning process.

"Before writing you my question and boasting of my diligence, I should have done my own homework first and examined the performance of the TOPIX REAL ESTATE INDEX and TOPIX BANKS INDEX during the 2002/2003 period.

"After doing so, I have seen that, in fact, during that previous reflation period, the real estate sector did "outperform" banks, similar to what we are seeing today. (I have included a link to the charts, which I created using the COMP function in Bloomberg)

"Previously, I had thought the recent outperformance of the real estate sector was anomalous, but rather, it appears in line with historical precedent. While I am not entirely sure what the "fundamental" cause is, I appreciate your gentle reminder that what matters is understanding mob psychology, not the subtleties of academic theory. If history rhymes, the mob might continue to favor real estate."

David Fuller's view Thanks for this additional email. I am sure that I am not the only reader who finds that subscribers' emails stimulate our thought processes, and certainly not just regarding Japan.

From a technical perspective, these two Topix charts (weekly 10-Yr & monthly 20-Yr) suggest that we may not be far away from a consolidation of gains seen over the last five months, which would provide an additional buying opportunity. Also, the pause between April 2004 and August 2005 was sufficiently lengthy to cause a loss of interest, as I recall. However, it was followed by another explosive advance as we can see.

Perhaps the end of QE will coincide with a similar pause in this bull market recovery, although this is obviously conjecture on my part. Nevertheless, I think there is a good chance that Japan will see an even bigger bull market over the next few years than the one which commenced ten years ago, assuming that Shinzo Abe's programmes remain popular with Japan's electorate.