I must plead guilty to your charge, Rick. I have overweighted EMs for years and got on board when they were all the rage. Having said that, I am staying on board during the tough times like now because of the reasons stated in my previous post.
In the past year I have spent some time in Europe, France and Spain in particular, and my observations of economic conditions there and also the ineffectual EU responses to their crisis (I don't think crisis is too strong a word) are not reassuring to put it mildly. Europe is clearly in recession and one can feel the pervasive pessimism in the European air about future economic prospects. There is an identity crisis going on in Europe about whether their social and political system as it has evolved can hold up and persist in a globalized world. How this all plays out is not clear.
Japan, the other large DM holding, is not a bed of roses either, so desperate to do something, anything, to get themselves out a 30+ recession and deflation that they are now instituting policies that make our own massive FED action look timid in comparison. Not sure how it will work out in the long run and I'm not sure anyone else does either.
In short, DMs have their own problems too. Are these DM problems and uncertainties fully expressed by their current stock valuations? At present the Vanguard DM index fund, a large cap DM fund, has the exact same PE as Vanguard US Large Cap index fund, 17.8. This does not seem to reflect the differences at ground level of the respective economies. It reflects considerable optimism for the near term economic future of DMs and in fact many of the financial talking heads have been predicting for more than a year an economic rebound in Europe which has clearly not occurred.