I got my introduction to investing outside the US in the mid-1980s, when I more or less stumbled into the field after I’d been an analyst for six years.
The shift was very lucky for me, because that was an incredible time to be involved in non-US markets. The formation of the EU had created a rush for domestic firms there to build scale and become more international. China under Deng was abandoning central planning in favor of “socialism with Chinese characteristics,” i.e., capitalism. Japan was also undergoing a radical transformation as the endaka (high yen) era began to empower a whole raft of non-samurai-based domestic demand-oriented firms.
Strategists for US brokerage firms generally argued at the time that the best way for domestic investors to participate was through US-based, US-listed multinationals. That may have been a good way (and it avoided having to hire/train/supervise/pay analysts focusing on non-US markets), but it was certainly far from the best.
In contrast, the past decade–actually most of the 21st century so far–hasn’t been kind to non-US economies. With the descendants of the anti-woman, anti-foreigner samurai back in charge in Japan, that country has scarcely recovered from the big recession of the early 1990s. In China, Xi has returned the country to central planning and begun to “reeducate” the entrepreneurs who made that economy boom in the joys of the party line. The UK decided to leave the EU to stem the inflow of foreigners. Curiously, it was apparently surprised that this lost it privileged access to the largest market for its exports and that foreign firms who’d come to the UK for access to the EU packed up and left (what were they thinking?).
Almost by default, then, the stock market oomph in the world for much of this century so far has been with US-based multinationals.
Is that about to change? Here’s why I worry it may:
I was reading this morning that FEMA workers have been pulled away from the job in North Carolina because armed militias are searching for them–apparently motived by Trump/Vance fabrications about the inadequacy of government response to hurricane damage there. The KKK and more gun-toting militias have turned up in Springfield, Ohio, which Vance represents in Congress, as well. This in response to Trump/Vance false claims that recently-arrived Haitian workers (who are giving that town a real economic shot in the arm) are eating the pet animals owned by long-time residents.
There’s a considerable chance that these two, in spite of their intentional cruelty and Trump’s apparently accelerating cognitive decline, will end up in the White House in January. This alone is enough, I think, to sooner or later knock a couple of points off the market PE. It isn’t just the duo’s general creepiness or their apparent allegiance to Thiel and Musk, though. The Trump economic plan, if plan is the right word, is to travel at full speed down the road that caused the Great Depression. Two whole generations of economists, to say nothing of Joseph Wharton, must be turning over in their graves.