17 November 1997: A major Japanese bank collapses
Hokkaido Takushoku Bank, one of Japan's largest commercial banks, announced it would fail and transfer its business to another lender, the first such collapse of a major bank in postwar Japan. Bad loans from the 1980s bubble had been papered over for years. A week later brokerage Yamaichi Securities also failed, deepening a banking crisis that kept Japan's economy and stock market stuck for years.
The lesson: Hiding bad loans delays the reckoning but usually makes it bigger.
What it meant for investors
$1,000 in Nikkei 225 at the start of 2000 → $2,632 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. That is 2.6 times the money, but $1,994 less than a plain index fund made over the same years.
What Nikkei 225 teaches: Even a large developed market can fail to reach its old peak for a generation, which is why buying at bubble valuations is dangerous for patient investors too.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $19,000 | $2,632 | $4,626 |
| 2003 | $8,600 | $5,814 | $7,727 |
| 2005 | $11,500 | $4,348 | $5,763 |
green = beat the S&P 500 · red = lost money
What if you bought Nikkei 225? Every starting year and the full story →
More Nikkei 225 history
- 29 January 2016: The Bank of Japan goes negative
- 11 March 2011: Japan's earthquake and tsunami
- 22 September 1985: The Plaza Accord takes down the dollar
- 24 November 1997: Yamaichi Securities collapses
- 29 December 1989: The Nikkei hits its all-time bubble peak
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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