Shouldn’t we be bargain hunting European stocks right now?

most posts i see are investing in US stocks and seems crazy to be so conservative while the dollar is so strong compared to every other currency. Isn't this an absolute land-grab opportunity here akin to when american grandparents traded warships for literal islands during WW2? that didn't turn out too badly at all.

US stocks will remain king, but we don't own the entire company you invest in, we own a small part, and profit off the percentage gain of a stock (and dividends) and that's it. One of the fastest growing economies in the world in the last few years has been Bangladesh - not because their annual GDP beat USA or China but because they grew a greater amount compared to where they were the year before. I'm not saying invest in Bangladesh, but if Europe sinks you should be diving at the dip, not running away from it, because the % gain in their recovery will be greater. Obviously if you're 50+ years old and are scared of a little volatility don't bother.

Not talking about S&P500 vs Europe, S&Ps record is good and safe but most of my holdings currently are American companies. But my focus will be on international stocks for the next while.

On my radar is AMAT and C, and will open a position in mining with RIO or BHP, but not sure which 🤔

Shouldn’t we be bargain hunting European stocks right now?  most posts i see are investing in US stocks and seems crazy to be so conservative while the dollar is so strong compared to every other currency. Isn't this an absolute land-grab opportunity here akin to when american grandparents traded warships for literal islands during WW2? that didn't turn out too badly at all.  US stocks will remain king, but we don't own the entire company you invest in, we own a small part, and profit off the percentage gain of a stock (and dividends) and that's it. One of the fastest growing economies in the world in the last few years has been Bangladesh - not because their annual GDP beat USA or China but because they grew a greater amount compared to where they were the year before. I'm not saying invest in Bangladesh, but if Europe sinks you should be diving at the dip, not running away from it, because the % gain in their recovery will be greater. Obviously if you're 50+ years old and are scared of a little volatility don't bother.  Not talking about S&P500 vs Europe, S&Ps record is good and safe but most of my holdings currently are American companies. But my focus will be on international stocks for the next while.  On my radar is AMAT and C, and will open a position in mining with RIO or BHP, but not sure which 🤔

Jerome Cody

Can't mention international stocks without the cycle chart!

https://www.hartfordfunds.com/dam/en/docs/pub/whitepapers/CCWP014.pdf

SPY has beaten VXUS by 300% the last decade and US companies are more international that ever so I don't see a reason to hold VXUS, but the cycle thing is probably the "strongest" argument.

Can't mention international stocks without the cycle chart!  https://www.hartfordfunds.com/dam/en/docs/pub/whitepapers/CCWP014.pdf  SPY has beaten VXUS by 300% the last decade and US companies are more international that ever so I don't see a reason to hold VXUS, but the cycle thing is probably the "strongest" argument.

Mostly because Europeans earn less. The amount spent as a % of GDP isn’t that much greater than other European countries.

That first link was fascinating. Despite being ~66% of the EU population, they spend double the money. Wow 🤯

I wonder if that’s because Europeans save more or earn less

1. Americans are large spenders. As you can see here (https://en.wikipedia.org/wiki/List_of_largest_consumer_markets), America has the largest consumer market by a considerable margin.

2. America ranks highly in ease of doing business. The EU often has unnecessarily bureaucratic business regulations. Not to mention access to startup funding and relatively friendly bankruptcy laws encourage American entrepreneurs to take risks.

3. The U.S poaches foreign talent. Salaries for most skilled professions are significantly higher than most of the world, allowing them to attract the best and brightest.

4. The U.S dollar is the global reserve currency.

5. Continued population growth. The E.U population is projected (https://www.statista.com/statistics/875955/population-of-europe-forecast/) to decrease by 2021. While the U.S. birth rate is below the replacement level, 2.1 children per women, it can, to a point, use immigration to ameliorate any potential demographic issues. As you can see here (https://en.wikipedia.org/wiki/List_of_sovereign_states_and_dependent_territories_by_immigrant_population), the U.S. accepts the most immigrants of any country by a considerable margin. Having a young population is great since it means more spenders and more workers.

6. The U.S. is unlikely to ever be invaded. It’s surrounded on the East and west by the two largest oceans and on the north and south by weak neighbors, not to mention it has the world’s most powerful military. As you can see with Taiwan, even the slightest risk of getting invaded is bad.

There are some other reasons, those are just some of the main ones I can think of.

1. Americans are large spenders. As you can see here (https://en.wikipedia.org/wiki/List_of_largest_consumer_markets), America has the largest consumer market by a considerable margin.  2. America ranks highly in ease of doing business. The EU often has unnecessarily bureaucratic business regulations. Not to mention access to startup funding and relatively friendly bankruptcy laws encourage American entrepreneurs to take risks.  3. The U.S poaches foreign talent. Salaries for most skilled professions are significantly higher than most of the world, allowing them to attract the best and brightest.  4. The U.S dollar is the global reserve currency.  5. Continued population growth. The E.U population is projected (https://www.statista.com/statistics/875955/population-of-europe-forecast/) to decrease by 2021. While the U.S. birth rate is below the replacement level, 2.1 children per women, it can, to a point, use immigration to ameliorate any potential demographic issues. As you can see here (https://en.wikipedia.org/wiki/List_of_sovereign_states_and_dependent_territories_by_immigrant_population), the U.S. accepts the most immigrants of any country by a considerable margin. Having a young population is great since it means more spenders and more workers.  6. The U.S. is unlikely to ever be invaded. It’s surrounded on the East and west by the two largest oceans and on the north and south by weak neighbors, not to mention it has the world’s most powerful military. As you can see with Taiwan, even the slightest risk of getting invaded is bad.  There are some other reasons, those are just some of the main ones I can think of.

All meaningful returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

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Illegitimi non carborundum

That first link was fascinating. Despite being ~66% of the EU population, they spend double the money. Wow 🤯  I wonder if that’s because Europeans save more or earn less

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1. movement of a stock relative to market.  
2. economic growth from population changes

Ok got it. Dummy question 1. what does beta mean, 2. Demographic dividends means… population growth? Or

Chris Nheu

1. movement of a stock relative to market.   2. economic growth from population changes

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I think luxury brands are a long term strength for Europe, but as a basket luxury brands are highly cyclical, and I’m not enough of a consumer to effectively pick single emerging luxury brands. 

It may be more useful to view luxury as part of the broader “consumer discretionary” category which is high beta and useful for short term bets around the tops and bottoms of economic cycles. For me that’s a different bet from bets I want to hold for a decade (tech dynamism, demographic dividends)

I think luxury brands are a long term strength for Europe, but as a basket luxury brands are highly cyclical, and I’m not enough of a consumer to effectively pick single emerging luxury brands.   It may be more useful to view luxury as part of the broader “consumer discretionary” category which is high beta and useful for short term bets around the tops and bottoms of economic cycles. For me that’s a different bet from bets I want to hold for a decade (tech dynamism, demographic dividends)

Jerome Cody

A group of likeminded people in The Most Important Thing are talking about this.