10 Comments

Great points raised in this post. Though at present it seems UK and Europe is not all that cheap once adjusting for growth relative to the US:

https://www.ft.com/__origami/service/image/v2/images/raw/ftcms%3A58d7265d-d30b-463b-9d86-774185804fd5?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1

Ultimately, and as you rightly point, it's all about growth prospects. The how and when is key.

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This piece suggests the difference is principally down to listing venue! https://mailchi.mp/verdadcap/explaining-international-valuations

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Very interesting and thought provoking indeed.

While you're at it, care to share perhaps what your friend (one of the greatest portfolio managers of our generation) thinks about US vs Europe now? Perhaps he's updated his view following his terrific run?

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Hey Mark - the referral link gave me a “page not found”…might want to fix that.

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Thanks for the article. On your comment regarding Europe not having the "Magnificent Seven" like the US, FT had published an interesting chart which showed European stocks outperforming S&P sans Nvidia on a returns basis (not market cap):

https://www.ft.com/content/c53a24e7-8c72-4ae4-a61a-35b0873ce061

Perhaps it is a case of a "Magnificent One"!

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Not so magnificent after yesterday!

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Well remembered, thanks Pete

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Thank you for this! It's super interesting and timely. I was just researching what bit US investment firms "recommend" to their clients.

Vanguard is 60/40 US/non-US. Fidelity is 70/30 US/non-US.

I pressed their "advisors" for information on how they make this weighting call, but they didn't have anything.

For a retail investor like me who's day job is not stock analysis (even though I'm probably more informed than average due to working in consumer financial services), this geographic weighting is the biggest "bet" I need to make with my portfolio. Because I otherwise adhere to total market low cost ETFs.

Do you have any idea on how Vanguard / Fidelity might be coming up with their numbers? Can you also help me tie them to the discussion you're having in this article? I'm not 100% clear on how the two things relate, even though they clearly relate in some way

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Sorry, Noah -- not sure how they are coming up with their allocations 🤷

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no sweat it was worth a shot haha

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