The S&P is up by about 16% so far in 2025. Sounds great, until you note that EAFE, basically the world ex the US, is ahead by about 26% in dollars over the same time span, due in considerble measure to the sharp drop in the value of the dollar since the inaguration–although one should note that the currency has stopped falling over the past while.

Even if we ignore exchange rate gyrations, though, +16% is a lot. In addition, shaping a portfolio that acknowledges, and trades on, the dollar weakness may well have produced a result that’s–to pluck a figure out of the air–double that of the S&P. Hence the question in my title.

I’m of two minds.

On the one hand, as one of my early bosses used to say, “Trees never grow to the sky,” meaning, in essense, that if you’re up a lot in a short period of time, you have to either look for fresh seedlings or at least consider playing more defense, to preserve the gains you’ve already made. So I’ve found myself looking for stocks that aren’t closely correlated with the ups and downs of the domestic economy, as well as for value-ish names, whose main virtue is that they won’t go down. And, of, course, there’s the possibility that someone will bid for them.

On the other, for some reason my mind keeps coming back to Japan of the mid- to late-1980s. In my reading of the stock market there, there was a massive, years-long shift from the export-oriented manufacturers who benefitted from the weak yen of eariler years to domestic names–from property to retail–that blossomed in the strong currency era that emerged in the 1980s. I keep thinking that the US is undergoing the reverse movement, which has certainly boosted the S&P this year. The point, though, is that the endaka period lasted for well over a decade. Yes, things all ended in tears, as the domestic working population began to shrink in the early 1990s. But the new currency regime triggered a multi-year bull market. Could that happen in the US as well? Here, the shift would be from domestic names to exporters, but still…