Another reason to be wary of international stocks...

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Sandtrap
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Re: Another reason to be wary of international stocks...

Post by Sandtrap » Sun Aug 19, 2018 11:30 pm

BWildt wrote:
Sun Aug 19, 2018 11:06 pm
https://www.cnbc.com/2018/08/17/chinas- ... ality.html

Thoughts?
Article by:
Bob Pisani
CNBC "On-Air Stocks" Editor

Consider this article by Fidelity on why International Investing is good right now.
https://www.fidelity.com/viewpoints/inv ... tlook-2018

Summary: ignore the noise, invest for the long term, diversify.

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oldzey
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Re: Another reason to be wary of international stocks...

Post by oldzey » Mon Aug 20, 2018 12:11 am

BWildt wrote:
Sun Aug 19, 2018 11:06 pm
https://www.cnbc.com/2018/08/17/chinas- ... ality.html

Thoughts?
Blue Line Jumps 11 Percent

NEW YORK–Excitement swept the financial world Monday, when a blue line jumped more than 11 percent, passing four black horizontal lines as it rose from 367.22 to 408.85.

It was the biggest single-day gain for a blue line since 1994.

Image
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Re: Another reason to be wary of international stocks...

Post by AlohaJoe » Mon Aug 20, 2018 12:16 am

BWildt wrote:
Sun Aug 19, 2018 11:06 pm
https://www.cnbc.com/2018/08/17/chinas- ... ality.html

Thoughts?
Are you saying that America's stock market does perfectly reflect economic reality? I don't understand what you are trying to imply about international? Are you saying that the UK stock market is exactly the same as the Chinese stock market? All international is exactly the same?

heyyou
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Re: Another reason to be wary of international stocks...

Post by heyyou » Mon Aug 20, 2018 2:45 am

There is always something that looks like it could go wrong soon, but what does go bad is seldom what was expected. I know that I don't know, so staying the course is the best that I can do. Shiller has noted that those with good returns in the accumulation years, could expect lower returns in the decumulation years.

Someone studied forecasters and found that the doom and gloom ones were more respected than those who said the future would probably be okay, regardless of the accuracy of either group's forecasts. It was about our preconceived behavioral perceptions, not the forecasts. Sorry about the alliteration.

Valuethinker
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Re: Another reason to be wary of international stocks...

Post by Valuethinker » Mon Aug 20, 2018 3:13 am

BWildt wrote:
Sun Aug 19, 2018 11:06 pm
https://www.cnbc.com/2018/08/17/chinas- ... ality.html

Thoughts?
The article makes the case that one should ignore the stock market in considering economic fundamentals.

So, fine.

It is not a warning against international investing per se?

Note many Chinese stocks are not investable by foreigners.

It is right to be worried about the influence of Turkey on the Eurozone, specifically some Spanish and Italian banks which are heavily exposed. European banks were trading at much lower multiples than American ones - the market is not an idiot about these things.

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Re: Another reason to be wary of international stocks...

Post by david1082b » Mon Aug 20, 2018 7:36 am

"In highly efficient full-production places like the U.S., the stock market is reflective somewhat to what the economy is doing.
From 2000 to 2011 the US economy grew but the total stock market returned nothing pretty much. Was that really reflective of the economy? Is that a reason to be wary of USA too? Avoid all stock markets perhaps since they are not directly linked to the economy? Comparing emerging markets fund VEIEX to total US index VTSMX from 2000 to 2011: http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

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nisiprius
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Re: Another reason to be wary of international stocks...

Post by nisiprius » Mon Aug 20, 2018 9:37 am

I don't like multi-link chains of financial reasoning, because even the strongest links are none too strong.

This one has a lot of links.

The article is talking about some relation between the Chinese stock market and the Chinese economy. Specifically, "Why the drop in China's stock market might not reflect its economic reality." Since the word "might not" is used, it is implicit that "and, then again, it might."

So, here's the chain as I see it:
  1. The Chinese stock market has dropped -10% or so YTD. (I'm basing that on the actual performance of a Fidelity China fund and an iShares China ETF because I'm too lazy to find an index.)
  2. That (a) might not reflect China's economic reality, which might be strong. Or, of course, then again, (b), it might be weak.
  3. National stock markets have a strong tendency to follow national economies. The fastest-growing economies have the fastest-growing stock markets.
  4. Therefore, Chinese stocks (a) might recover, or (b) might not.
  5. Therefore, one should be wary of Chinese stocks.
  6. Chinese stocks are international stocks from the point of view of a US investor.
  7. Therefore, US investors should be wary of international stocks.
Link #1 is strong. Link #2 has the qualifier "might," so, weak. Link #3 just ain't so. So, weak. Link #4 is a valid inference from links 1-3 so, strong. Link #5 follows from #4, so, strong. Link #6 is just a fact, so, strong. Link #7 just doesn't follow from #5 and #6, it's an elementary logic error, so it is weak.

The biggest problem, by the way, is that it is absolutely proverbial that, at least on intermediate-term time scales, fast economic growth does not imply fast stock-market growth, probably because GDP is information that everyone has.

So, a seven-link chain with three weak links.
Last edited by nisiprius on Mon Aug 20, 2018 8:05 pm, edited 5 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Another reason to be wary of international stocks...

Post by Dottie57 » Mon Aug 20, 2018 9:40 am

oldzey wrote:
Mon Aug 20, 2018 12:11 am
BWildt wrote:
Sun Aug 19, 2018 11:06 pm
https://www.cnbc.com/2018/08/17/chinas- ... ality.html

Thoughts?
Blue Line Jumps 11 Percent

NEW YORK–Excitement swept the financial world Monday, when a blue line jumped more than 11 percent, passing four black horizontal lines as it rose from 367.22 to 408.85.

It was the biggest single-day gain for a blue line since 1994.

Image
Where can I buy a fund following the Blue Line Index? :shock:

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Re: Another reason to be wary of international stocks...

Post by Call_Me_Op » Mon Aug 20, 2018 9:45 am

Stay the course.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

dkturner
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Re: Another reason to be wary of international stocks...

Post by dkturner » Mon Aug 20, 2018 1:22 pm

Call_Me_Op wrote:
Mon Aug 20, 2018 9:45 am
Stay the course.
Even if you were heading for the rocks when you set “the” (as opposed to “a”) course?

WhiteMaxima
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Re: Another reason to be wary of international stocks...

Post by WhiteMaxima » Mon Aug 20, 2018 1:27 pm

listening to CNBC for investment? Those talk show program has no credibility at all. I mean none. I would still believe maintain a balanced folio (30/30/40, US/intl'/Bond indexed) would lead financial success in the long run.

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Re: Another reason to be wary of international stocks...

Post by Call_Me_Op » Mon Aug 20, 2018 1:29 pm

dkturner wrote:
Mon Aug 20, 2018 1:22 pm
Call_Me_Op wrote:
Mon Aug 20, 2018 9:45 am
Stay the course.
Even if you were heading for the rocks when you set “the” (as opposed to “a”) course?
The point of broad diversification is you send out a whole fleet of ships, so if one or two hit the rocks the fleet as a whole still lives to fight another day.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Another reason to be wary of international stocks...

Post by DesertDiva » Mon Aug 20, 2018 2:17 pm

Call_Me_Op wrote:
Mon Aug 20, 2018 1:29 pm
dkturner wrote:
Mon Aug 20, 2018 1:22 pm
Call_Me_Op wrote:
Mon Aug 20, 2018 9:45 am
Stay the course.
Even if you were heading for the rocks when you set “the” (as opposed to “a”) course?
The point of broad diversification is you send out a whole fleet of ships, so if one or two hit the rocks the fleet as a whole still lives to fight another day.
+1
My 2 international holdings from retirement accounts:
  • VTIAX - Vanguard Total International Stock Index Fund Admiral Shares - 29% Pacific stocks (therefore, > 70% are "non-Pacific")
  • FSIVX - Fidelity International Index Premium Class - 12.34% Asia-Pacific stocks excluding Japan (therefore, > 87% are "non-Pacific" including Japan)
CONCLUSION: Since my investment plan allows for no more than 20% of investments in International, a very small percentage of my money is attached to China. Following Boglehead principles helps me tune out the noise and relax.
♫ Stocks go up ♫ Stocks go down ♫ Stocks go up ♫ Stocks go down ♫ - Second verse same as the first

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Gort
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Re: Another reason to be wary of international stocks...

Post by Gort » Mon Aug 20, 2018 3:11 pm

You could also say "Another reason to be wary of domestic stocks..."

JoeRetire
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Re: Another reason to be wary of international stocks...

Post by JoeRetire » Mon Aug 20, 2018 3:15 pm

oldzey wrote:
Mon Aug 20, 2018 12:11 am
BWildt wrote:
Sun Aug 19, 2018 11:06 pm
https://www.cnbc.com/2018/08/17/chinas- ... ality.html

Thoughts?
Blue Line Jumps 11 Percent

NEW YORK–Excitement swept the financial world Monday, when a blue line jumped more than 11 percent, passing four black horizontal lines as it rose from 367.22 to 408.85.

It was the biggest single-day gain for a blue line since 1994.

Image
Glad I bought me some blue line!

J295
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Re: Another reason to be wary of international stocks...

Post by J295 » Mon Aug 20, 2018 3:17 pm

Noise

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dccboone
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Re: Another reason to be wary of international stocks...

Post by dccboone » Mon Aug 20, 2018 3:25 pm

I think you should consider renaming your thread “Another Reason to be Wary of CNBC.” I don’t take investment advice from CNBC for one very simple reason – I’m not their primary customer and neither are you. If you want to know who their customers are, just watch which companies are their most frequent advertisers. That’s their customer, that’s who pays the bills and that’s who they try to please. Its brokerage firms and the like who make their money by buying and selling securities for others. Viewers like you and I are simply the audience they target to deliver results to their customers. The job of CNBC commentators is to get those watching to either buy or sell. It doesn’t matter which - either way, their customers make money. Best regards.

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Re: Another reason to be wary of international stocks...

Post by bayview » Tue Aug 21, 2018 7:37 am

oldzey wrote:
Mon Aug 20, 2018 12:11 am
Blue Line Jumps 11 Percent

NEW YORK–Excitement swept the financial world Monday, when a blue line jumped more than 11 percent, passing four black horizontal lines as it rose from 367.22 to 408.85.

It was the biggest single-day gain for a blue line since 1994.

Image
One of my favorites.

Thank goodness for The Onion, adding perspective to our lives.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

bgf
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Re: Another reason to be wary of international stocks...

Post by bgf » Tue Aug 21, 2018 7:46 am

bayview wrote:
Tue Aug 21, 2018 7:37 am
oldzey wrote:
Mon Aug 20, 2018 12:11 am
Blue Line Jumps 11 Percent

NEW YORK–Excitement swept the financial world Monday, when a blue line jumped more than 11 percent, passing four black horizontal lines as it rose from 367.22 to 408.85.

It was the biggest single-day gain for a blue line since 1994.

Image
One of my favorites.

Thank goodness for The Onion, adding perspective to our lives.
i have never seen that before! thank you so much for brightening my morning.

"And even if this important line continues its upward pointiness, we must remember that there are other shapes, colors, numbers, and lines to consider when judging the health of the economy."

Reames also warned that the upward angle of the line, which most analysts agreed was approximately 80 degrees, may have been exaggerated by the way the graph was drawn.

*caption of photo (A group of white men makes cell-phone calls to discuss the blue line.)

love it.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

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Re: Another reason to be wary of international stocks...

Post by pennylane » Tue Aug 21, 2018 8:01 am

dccboone wrote:
Mon Aug 20, 2018 3:25 pm
I think you should consider renaming your thread “Another Reason to be Wary of CNBC.” I don’t take investment advice from CNBC for one very simple reason – I’m not their primary customer and neither are you. If you want to know who their customers are, just watch which companies are their most frequent advertisers. That’s their customer, that’s who pays the bills and that’s who they try to please. Its brokerage firms and the like who make their money by buying and selling securities for others. Viewers like you and I are simply the audience they target to deliver results to their customers. The job of CNBC commentators is to get those watching to either buy or sell. It doesn’t matter which - either way, their customers make money. Best regards.
well put

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Re: Another reason to be wary of international stocks...

Post by bayview » Tue Aug 21, 2018 8:03 am

Another favorite:

Image
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

2015
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Re: Another reason to be wary of international stocks...

Post by 2015 » Tue Aug 21, 2018 2:46 pm

Marketing disguised as "information".

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