Name: International Investment Opportunities for the Next Year
Uploaded: 2019-11-20
Duration: 3 min 52 s
Description: Is the U.S. still the only place seeing reliable stock price growth?

[ MUSIC ] What I was gonna say is we've been talking quite a bit about our conversation has been very domestically focused. But are people seeing opportunities in markets outside of the states right now. The story for a long time has been that really this is the only place where you're going to get reliable stock price growth and reliable earnings. But is that Could that be changing? Could we see that change in the next 12 months? Well, it's been a 50 % performance for US stocks versus international stocks in the cycle. So for people that said you don't need International, they look really smart. That's absolutely been true. And you can look at that at any time frame you want from one year to five years to 10 years. It actually gets worse and worse as the time horizon. So a lot of this is currency driven, a lot of that is political, a lot of that is Central Bank driven. It's really tough to say when that's gonna switch. I know some people look at technicals and they try to say, it's one market breaking out relative to another. If you were playing that game right now, emerging markets look pretty good ->> Yep. And then international markets would still be a toss up. So look at that and try to decide fundamentally, when are people gonna get excited about? European stock trading 12 times earnings. I don't know when that will be because you would have thought it would happen at 14 times earnings, and it hasn't. I think the problem with looking at international broadly is there are such deep structural problems in places like Europe and Japan and there are some good things going in the Japanese market in terms of better corporate governance, better capital management etc. But you don't have a lot of innovation and you don't have kind of position to, [ CROSSTALK ] As I said- GDP growth. You're right, the industry differences are bigger. Much bigger, yeah. The tech sector is miniscule in many of these countries. And if you're saying that's what's driving the S & P Then the out- performance makes perfect sense. But if you look at the under- performing sectors, financials and energy they are very dominant in European industries. So I do think emerging markets is a good place to look. And there are a lot of emerging markets that have structurally improved and there are a lot of really good companies in a number of different emerging markets. From a from a private market perspective, these structural challenges actually present opportunity. So if you just look at financial services been spending a lot of time in Latin America. So on the one hand, you could look and say well credit card penetration, it's like 14 or 15 % in a lot of countries and it hasn't done anything for a while. But smartphone penetration has gone from that level up to. 80 % so structurally Yes, we could wait for bank branches to be established all around and serve the population or everybody's now got their smartphones. That's how financial services are gonna be provided. And that's exactly what's happening And I think what's interesting is that with the phone and all the data provided, you can bypass things that would seem like structural impossibilities like no credit bureaus and no branches. You've all the data that you could possibly need on the phone and the delivery mechanism So there's clever companies that are starting with small dollar lending using data signals like how up to date is your Android operating system you know, do you charge your phone at night and a whole variety of other signals and they're becoming the credit bureau and the bank at the same time. To your point. Like if you bought The Brazilian ETF ten years ago, you have no return to show for it. But if you bought Mercado Libre you're up 1, 000 % and change, which is the payment processors slash e commerce play of Brazil. So that's a really good point that you're making. So there are massive secular trends that are opportunities for any global company. True. You mentioned basically financial inclusion, right and turns out it's a really good business proposition to get the 1. 5, 1. 8 billion [ UNKNOWN ] people. ->> Absolutely. In as customers. You mentioned to us in diagnostic companies in China a lot of. Those kinds of companies are growing like a weed providing the highest quality reagents, cell cultures for this move to biologics. Also things like air emissions monitoring, clean water, again, we're not gonna need any less of that in the future. [ BLANK_AUDIO ]

International Investment Opportunities for the Next Year

Finance

Is the U.S. still the only place seeing reliable stock price growth?