point of maximal pessimism for international investing

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3CT_Paddler
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Re: point of maximal pessimism for international investing

Post by 3CT_Paddler » Wed May 08, 2019 11:32 am

Achkelone wrote:
Wed May 08, 2019 4:02 am
I got the joke when you wrote about Taco Bell, but until then, I did take your post seriously. Because there are plenty of US citizens who unironically think in these narrow, almost nationalist terms :-?
And since this forum is already quite biased towards US investing only, it'wasn't far fetched to consider that you truly were making the case for "patriotic investments".
I would beg to differ that this forum is biased against US investing only. It is biased towards whatever strategy is working at the moment. From 2005-2012 many on this board staunchly supported a global cap weighted portfolio. It has flipped because of the change in outcomes... same could be said for the small cap value approach - its popularity on this board changes over time based on recent success or lack thereof.

As far as the politics that you and others are hinting at in this thread, most of the political posts I see on this board are in the other direction... that arguing for US only is some kind of support of US nationalism or US superiority.

pward
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Re: point of maximal pessimism for international investing

Post by pward » Wed May 08, 2019 11:39 am

Just food for thought here, but is comparing PE, PB, (*insert whatever valuation metric here*), etc between countries apples to apples or apples to oranges? Are other countries cheaper in these metrics because they are undervalued, or because they deserve to be cheaper for one reason or another (risk, laws, local economics, potential growth, politics, etc)?

Thesaints
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Re: point of maximal pessimism for international investing

Post by Thesaints » Wed May 08, 2019 12:34 pm

pward wrote:
Wed May 08, 2019 11:39 am
Just food for thought here, but is comparing PE, PB, (*insert whatever valuation metric here*), etc between countries apples to apples or apples to oranges? Are other countries cheaper in these metrics because they are undervalued, or because they deserve to be cheaper for one reason or another (risk, laws, local economics, potential growth, politics, etc)?
Is comparing PE, PB, or any other simple metrics, between domestic stocks apples to apples ?

lahob
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Re: point of maximal pessimism for international investing

Post by lahob » Wed May 08, 2019 1:07 pm

Prahasaurus wrote:
Wed May 08, 2019 2:05 am
IT WAS A JOKE. IT WAS SATIRE. I am quite sure Bogle did not advocate finding companies to invest in that ONLY do business in the USA, refusing to accept business outside of the USA. That would be a ridiculous limiting factor.

I thought it was funny to take some arguments here to the extreme: higher returns with US stocks only, which include some international exposure, over US + International portfolios. The joke was: why not just eliminate all possible "foreign" exposure, find companies that ONLY do business in the USA, refuse to accept non American business, and the returns will logically be even higher! Ha, get it? It's a joke, because I was sure nobody would take it seriously.

In hindsight, I will now add lots of smiley faces to all of my satirical posts, since, as my British friends often tell me, "Americans don't get satire."

"Non-USA countries...." Bright future in railroads... I still chuckle when I read that.
This is a great example of Poe's Law:
Without a winking smiley or other blatant display of humor, it is utterly impossible to parody [...] in such a way that someone won't mistake for the genuine article.
By the way, I thought it was funny. :happy

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JoMoney
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Re: point of maximal pessimism for international investing

Post by JoMoney » Wed May 08, 2019 9:00 pm

Thesaints wrote:
Wed May 08, 2019 12:34 pm
pward wrote:
Wed May 08, 2019 11:39 am
Just food for thought here, but is comparing PE, PB, (*insert whatever valuation metric here*), etc between countries apples to apples or apples to oranges? Are other countries cheaper in these metrics because they are undervalued, or because they deserve to be cheaper for one reason or another (risk, laws, local economics, potential growth, politics, etc)?
Is comparing PE, PB, or any other simple metrics, between domestic stocks apples to apples ?
Nope, Would you consider it the same thing between sectors, say looking at the book value of a utility company with big fixed durable assets compared to a tech company that's only asset is intellectual property ?
International has different sector weightings, and different accounting standards to boot...
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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whodidntante
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Re: point of maximal pessimism for international investing

Post by whodidntante » Wed May 08, 2019 9:34 pm

Image

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JoMoney
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Re: point of maximal pessimism for international investing

Post by JoMoney » Wed May 08, 2019 10:11 pm

"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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whodidntante
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Re: point of maximal pessimism for international investing

Post by whodidntante » Wed May 08, 2019 10:20 pm

JoMoney wrote:
Wed May 08, 2019 10:11 pm
Huh... :confused
We should probably test what he said before getting confused. :beer

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JoMoney
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Re: point of maximal pessimism for international investing

Post by JoMoney » Wed May 08, 2019 10:22 pm

An interesting comparison of MSCI EAFE to the S&P 500 up through 2008
The "Net Return" index is after foreign tax withholding, "Gross Return" is without
MSCI EAFE NR USD

MSCI EAFE GR USD

Maybe Faber is close (if you don't count foreign taxes and higher expenses)
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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gmaynardkrebs
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Re: point of maximal pessimism for international investing

Post by gmaynardkrebs » Wed May 08, 2019 10:28 pm

Prahasaurus wrote:
Tue May 07, 2019 4:48 pm
TomatoTomahto wrote:
Tue May 07, 2019 4:37 pm
Prahasaurus wrote:
Tue May 07, 2019 12:20 am
I'm for 100% USA. In fact, I refuse to hold index funds because I've recently learned that many US firms actually do business in non-USA countries, depressing returns. This shocking fact has led me to craft a pure "America First" portfolio. I only purchase USA based companies that refuse to do business outside of the USA. This ensures I can maximize my returns - at least based on what I've seen over the past year - but more importantly, avoid foreign infiltration and dilution.

I currently hold US Treasuries. And Norfolk Southern (NSC) railroads. I'm thinking we've only just tapped the amazing potential of American railroads, so there's huge upside, all colored red, white, and blue. Thinking of adding Taco Bell to my America First portfolio, but need to research more. Not sure if it's a stock, however. But I love their food. Just need to make sure there are no Taco Bells in Mexico or Canada before I pull the trigger.
And yet, a few days earlier, you said
While my bond allocation is a bit more complex in taxable, my equity position is simple: VTWAX. I own the entire market, no need to rebalance US v International or fiddle with specific industries. Just buy regularly and forget.
Are you having a laugh?
Wow, how could anyone take my post seriously? "Non-USA countries"??? "America First portfolio"????? Wondering if Taco Bell was in Mexico? Just the entire concept of a portfolio of companies that only do business in the USA???? Come on guys, how obvious can it be?
Because Buffet says much the same rah-rah USA "stuff."

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whodidntante
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Re: point of maximal pessimism for international investing

Post by whodidntante » Wed May 08, 2019 10:40 pm

JoMoney wrote:
Wed May 08, 2019 10:22 pm
An interesting comparison of MSCI EAFE to the S&P 500 up through 2008
The "Net Return" index is after foreign tax withholding, "Gross Return" is without
MSCI EAFE NR USD

MSCI EAFE GR USD

Maybe Faber is close (if you don't count foreign taxes and higher expenses)
Thanks. I was pretty sure he would be correct, for certain values of correct. Backtester is his middle name. LOL

lostdog
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Re: point of maximal pessimism for international investing

Post by lostdog » Wed May 08, 2019 10:58 pm

Prahasaurus wrote:
Tue May 07, 2019 12:20 am
I'm for 100% USA. In fact, I refuse to hold index funds because I've recently learned that many US firms actually do business in non-USA countries, depressing returns. This shocking fact has led me to craft a pure "America First" portfolio. I only purchase USA based companies that refuse to do business outside of the USA. This ensures I can maximize my returns - at least based on what I've seen over the past year - but more importantly, avoid foreign infiltration and dilution.

I currently hold US Treasuries. And Norfolk Southern (NSC) railroads. I'm thinking we've only just tapped the amazing potential of American railroads, so there's huge upside, all colored red, white, and blue. Thinking of adding Taco Bell to my America First portfolio, but need to research more. Not sure if it's a stock, however. But I love their food. Just need to make sure there are no Taco Bells in Mexico or Canada before I pull the trigger.
:sharebeer

I am still laughing!
VTWAX and chill.

lostdog
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Re: point of maximal pessimism for international investing

Post by lostdog » Wed May 08, 2019 11:00 pm

visualguy wrote:
Tue May 07, 2019 12:53 am
garlandwhizzer wrote:
Mon May 06, 2019 7:20 pm
Will it be more of the same in the future or will the tide reverse? The following is an article that argues that we are near the point of maximal pessimism for international equity and that those like me who have held on to underperforming INTL for many years should take heart after the beating we've received. The author argues that all the numerous INTL political and economic problems plus the persistent INTL underperformance has paradoxically set the stage for future success. Comments?
"The future" is a very long time... If you're talking about the next 2-3 decades, then it's likely to be more of the same. 50 or 100 years from now, who knows.
I need some numbers for the next powerball ticket I buy. Can you check your crystal ball for me? Thanks....
VTWAX and chill.

lostdog
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Re: point of maximal pessimism for international investing

Post by lostdog » Wed May 08, 2019 11:10 pm

Achkelone wrote:
Wed May 08, 2019 4:02 am
Prahasaurus wrote:
Tue May 07, 2019 4:48 pm
Wow, how could anyone take my post seriously? "Non-USA countries"??? "America First portfolio"????? Wondering if Taco Bell was in Mexico? Just the entire concept of a portfolio of companies that only do business in the USA???? Come on guys, how obvious can it be?
I got the joke when you wrote about Taco Bell, but until then, I did take your post seriously. Because there are plenty of US citizens who unironically think in these narrow, almost nationalist terms :-?
And since this forum is already quite biased towards US investing only, it'wasn't far fetched to consider that you truly were making the case for "patriotic investments".

We can get away with American exceptionalism and ideologies. Anymore detail would involve political and ideological views which are not permitted here. If you read between the lines it's quite obvious
VTWAX and chill.

mariezzz
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Re: point of maximal pessimism for international investing

Post by mariezzz » Thu May 09, 2019 12:05 am

TomatoTomahto wrote:
Tue May 07, 2019 4:37 pm
Prahasaurus wrote:
Tue May 07, 2019 12:20 am
I'm for 100% USA. In fact, I refuse to hold index funds because I've recently learned that many US firms actually do business in non-USA countries, depressing returns. This shocking fact has led me to craft a pure "America First" portfolio. I only purchase USA based companies that refuse to do business outside of the USA. This ensures I can maximize my returns - at least based on what I've seen over the past year - but more importantly, avoid foreign infiltration and dilution.

I currently hold US Treasuries. And Norfolk Southern (NSC) railroads. I'm thinking we've only just tapped the amazing potential of American railroads, so there's huge upside, all colored red, white, and blue. Thinking of adding Taco Bell to my America First portfolio, but need to research more. Not sure if it's a stock, however. But I love their food. Just need to make sure there are no Taco Bells in Mexico or Canada before I pull the trigger.
And yet, a few days earlier, you said
While my bond allocation is a bit more complex in taxable, my equity position is simple: VTWAX. I own the entire market, no need to rebalance US v International or fiddle with specific industries. Just buy regularly and forget.
Are you having a laugh?
For those who are into hedging: There's a privacy hedge the Canadians planted along their southern border.
https://outabouter.com/2017/01/18/conce ... -s-border/

mariezzz
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Re: point of maximal pessimism for international investing

Post by mariezzz » Thu May 09, 2019 12:39 am

:D :D :D

visualguy
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Re: point of maximal pessimism for international investing

Post by visualguy » Thu May 09, 2019 2:50 am

lostdog wrote:
Wed May 08, 2019 11:00 pm
I need some numbers for the next powerball ticket I buy. Can you check your crystal ball for me? Thanks....
Can't help you with that one, sorry, because it's random. Europe, Japan, China, etc. stock index performance isn't random, and there isn't enough time for things to change sufficiently there in my time frame. It will take too long even if it ever happens. Maybe ok for future generations, particularly if China ever changes its system down the road.

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