ex-US Stocks Continue to Soar!

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Triple digit golfer
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Re: ex-US Stocks Continue to Soar!

Post by Triple digit golfer »

luckyducky99 wrote: Mon Sep 06, 2021 5:33 pm
visualguy wrote: Mon Sep 06, 2021 4:02 pm I don't know either why these false analogies keep being brought up. Not diversifying beyond indexing the US stock market? Then why not just tech? And if just tech, then why not just Apple? It's a reductio ad absurdum fallacy.
I don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.

What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
Performance chasing is the only fallacy here.
marcopolo
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Re: ex-US Stocks Continue to Soar!

Post by marcopolo »

Triple digit golfer wrote: Mon Sep 06, 2021 5:45 pm
luckyducky99 wrote: Mon Sep 06, 2021 5:33 pm
visualguy wrote: Mon Sep 06, 2021 4:02 pm I don't know either why these false analogies keep being brought up. Not diversifying beyond indexing the US stock market? Then why not just tech? And if just tech, then why not just Apple? It's a reductio ad absurdum fallacy.
I don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.

What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
Performance chasing is the only fallacy here.
Isn't all (cap weighted) index investing performance chasing?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.

Even if you tilt to an under performong segement of the market, say SCV using an ETF like IJS, the stocks included in that fund are held at cap weight, so even within that tilt to an underperforming corner of the market, you are kind of performance chasing. The same is true for most international index funds/ETFs.
Once in a while you get shown the light, in the strangest of places if you look at it right.
lostdog
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Re: ex-US Stocks Continue to Soar!

Post by lostdog »

If you invest outside of world market cap, you're saying you know more than the market.

Performance chasers come up with all kinds of excuses.

VT and chill.
Triple digit golfer
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Re: ex-US Stocks Continue to Soar!

Post by Triple digit golfer »

marcopolo wrote: Mon Sep 06, 2021 6:20 pm
Triple digit golfer wrote: Mon Sep 06, 2021 5:45 pm
luckyducky99 wrote: Mon Sep 06, 2021 5:33 pm
visualguy wrote: Mon Sep 06, 2021 4:02 pm I don't know either why these false analogies keep being brought up. Not diversifying beyond indexing the US stock market? Then why not just tech? And if just tech, then why not just Apple? It's a reductio ad absurdum fallacy.
I don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.

What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
Performance chasing is the only fallacy here.
Isn't all (cap weighted) index investing performance chasing?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.

Even if you tilt to an under performong segement of the market, say SCV using an ETF like IJS, the stocks included in that fund are held at cap weight, so even within that tilt to an underperforming corner of the market, you are kind of performance chasing. The same is true for most international index funds/ETFs.
World cap weighted is a neutral position, being the entire world stock market.

By your logic, anything other than equal weight among every publicly traded company in the world would be performance chasing.
DB2
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Re: ex-US Stocks Continue to Soar!

Post by DB2 »

rwl10267 wrote: Mon Sep 06, 2021 3:15 pm
You act like anybody who holds 20-40% in international stocks is making a 100% bet on international.
I think what puzzles many, certainly me, is Vanguard's insistence that 40% (or more, perhaps) of stock holdings be ex-US. I argued for a long time with the Vanguard rep over that position years ago and we ended up agreeing to disagree. I started with 25% (and cringed when I did), which has since been bled down to about 20% simply though ex-Us underperformance. The world is no longer like the 1970s. The EU is a mess, the world's second largest economy is a riddle wrapped in a mystery, and the USD is still the world's reserve currency. That last thought is the one that keeps me up at night: What happens when (not if) the world finally turns its back on USD hegemony in favor of, say, a basket of GDP-weighted currencies? That huge and artificial tailwind for the USD and the US economy by extension ceases, and the game entirely changes in many more ways other than stock valuations.
Agreed on all points. In a sense, it reminds me of the frustration with bonds since they are very likely to have real negative returns for the next ten years, yet there is a need to have them still (in my view). I believe the U.S. will continue to outperform until the next real bear market hits (not counting March 2020). After that, things could get interesting and I am one of the few who believes the debt and deficits are going to matter A LOT at some point.
Marseille07
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Re: ex-US Stocks Continue to Soar!

Post by Marseille07 »

Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
Last edited by Marseille07 on Mon Sep 06, 2021 7:33 pm, edited 1 time in total.
visualguy
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Re: ex-US Stocks Continue to Soar!

Post by visualguy »

Marseille07 wrote: Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
It is pretty shocking to realize that it was already at that level 33 years ago.
Marseille07
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Re: ex-US Stocks Continue to Soar!

Post by Marseille07 »

visualguy wrote: Mon Sep 06, 2021 7:32 pm
Marseille07 wrote: Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
It is pretty shocking to realize that it was already at that level 33 years ago.
Yeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
visualguy
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Re: ex-US Stocks Continue to Soar!

Post by visualguy »

marcopolo wrote: Mon Sep 06, 2021 6:20 pm Isn't all (cap weighted) index investing performance chasing?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.

Even if you tilt to an under performong segement of the market, say SCV using an ETF like IJS, the stocks included in that fund are held at cap weight, so even within that tilt to an underperforming corner of the market, you are kind of performance chasing. The same is true for most international index funds/ETFs.
Cap-weighted indexing is indeed by its very nature performance chasing as you explained.
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Re: ex-US Stocks Continue to Soar!

Post by visualguy »

Marseille07 wrote: Mon Sep 06, 2021 7:34 pm
visualguy wrote: Mon Sep 06, 2021 7:32 pm
Marseille07 wrote: Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
It is pretty shocking to realize that it was already at that level 33 years ago.
Yeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
Not so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.
Triple digit golfer
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Re: ex-US Stocks Continue to Soar!

Post by Triple digit golfer »

visualguy wrote: Mon Sep 06, 2021 7:50 pm
Marseille07 wrote: Mon Sep 06, 2021 7:34 pm
visualguy wrote: Mon Sep 06, 2021 7:32 pm
Marseille07 wrote: Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
It is pretty shocking to realize that it was already at that level 33 years ago.
Yeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
Not so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.
No you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.
visualguy
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Re: ex-US Stocks Continue to Soar!

Post by visualguy »

Triple digit golfer wrote: Mon Sep 06, 2021 8:03 pm
visualguy wrote: Mon Sep 06, 2021 7:50 pm
Marseille07 wrote: Mon Sep 06, 2021 7:34 pm
visualguy wrote: Mon Sep 06, 2021 7:32 pm
Marseille07 wrote: Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
It is pretty shocking to realize that it was already at that level 33 years ago.
Yeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
Not so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.
No you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.
Just the top 5 stocks in the US stock market make up a larger percentage of VTI than the percentage of all Japanese companies together within VXUS. The effect of individual companies and stock markets is very diluted within VXUS.
Triple digit golfer
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Re: ex-US Stocks Continue to Soar!

Post by Triple digit golfer »

visualguy wrote: Mon Sep 06, 2021 8:35 pm
Triple digit golfer wrote: Mon Sep 06, 2021 8:03 pm
visualguy wrote: Mon Sep 06, 2021 7:50 pm
Marseille07 wrote: Mon Sep 06, 2021 7:34 pm
visualguy wrote: Mon Sep 06, 2021 7:32 pm

It is pretty shocking to realize that it was already at that level 33 years ago.
Yeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
Not so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.
No you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.
Just the top 5 stocks in the US stock market make up a larger percentage of VTI than the percentage of all Japanese companies together within VXUS. The effect of individual companies and stock markets is very diluted within VXUS.
I don't think you understand my point. In any stock market, only a small percentage of stocks are actually positive in a given period of time. You don't need a high percentage to be profitable. You just need a few to be really profitable. I'm saying the same principle applies in a world market fund. You don't need multiple markets to do well. You just need a few to do really well.
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2pedals
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Re: ex-US Stocks Continue to Soar!

Post by 2pedals »

Rooting for the underdog! I think I can smell and taste it but we will see. :mrgreen:
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UpsetRaptor
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Re: ex-US Stocks Continue to Soar!

Post by UpsetRaptor »

marcopolo wrote: Mon Sep 06, 2021 6:20 pm
Triple digit golfer wrote: Mon Sep 06, 2021 5:45 pm
luckyducky99 wrote: Mon Sep 06, 2021 5:33 pm
visualguy wrote: Mon Sep 06, 2021 4:02 pm I don't know either why these false analogies keep being brought up. Not diversifying beyond indexing the US stock market? Then why not just tech? And if just tech, then why not just Apple? It's a reductio ad absurdum fallacy.
I don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.

What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
Performance chasing is the only fallacy here.
Isn't all (cap weighted) index investing performance chasing?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.
Yeah, I never really got the "performance chasing" slander, for any reasonable, diverse, buy-and-hold portfolio that doesn't involve moving in-and-out of positions. The whole case for global market cap weighting itself is that, by maximizing diversification among the equities asset class, it should theoretically maximize risk-adjusted performance (so the theory goes, anyways). So....

And couldn't simply investing any portion of your portfolio into equities over bonds (or anything above the risk free line), be called "performance chasing"?

Anywho, looks like exUS will have a very nice start to the week. Best of luck to all.
Tamalak
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Re: ex-US Stocks Continue to Soar!

Post by Tamalak »

What a fizzle. I guess Japan isn't such a big part of the world..
Marseille07
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Re: ex-US Stocks Continue to Soar!

Post by Marseille07 »

Tamalak wrote: Tue Sep 07, 2021 8:38 am What a fizzle. I guess Japan isn't such a big part of the world..
Yeah, that's what the poster visualguy mentioned upthread. Japan being 16% of VXUS isn't significant.
rwl10267
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Re: ex-US Stocks Continue to Soar!

Post by rwl10267 »

visualguy wrote: Mon Sep 06, 2021 8:35 pm
Triple digit golfer wrote: Mon Sep 06, 2021 8:03 pm
visualguy wrote: Mon Sep 06, 2021 7:50 pm
Marseille07 wrote: Mon Sep 06, 2021 7:34 pm
visualguy wrote: Mon Sep 06, 2021 7:32 pm

It is pretty shocking to realize that it was already at that level 33 years ago.
Yeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
Not so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.
No you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.
Just the top 5 stocks in the US stock market make up a larger percentage of VTI than the percentage of all Japanese companies together within VXUS. The effect of individual companies and stock markets is very diluted within VXUS.
IMO visualguy hits the nail on the head re: ex-US performance, or lack thereof. Each country component is subject to its own unique regulatory, fiscal, and market frictions with no synchronizing mechanism such that the whole can never be greater than the sum of its parts. If true, these inhibitions help to explain why ex-US has underperformed so dramatically over time. And with a 90% correlation with US stocks, one might legitimately wonder, "what's the point?" My own observation for the last many years is that the only real value provided by an ex-US portfolio is as an (imperfect) hedge against a falling dollar. As such, I have decided to allow my current 20% ex-US holding (VXUS) deteriorate into oblivion unless something dramatic occurs to alter the dynamic, like a change in reserve currency status. To holdouts, I offer that the namesake of this forum also believed that ex-US investments were not worth the time, effort, and incremental costs.
Blue456
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Re: ex-US Stocks Continue to Soar!

Post by Blue456 »

Marseille07 wrote: Tue Sep 07, 2021 9:42 am
Tamalak wrote: Tue Sep 07, 2021 8:38 am What a fizzle. I guess Japan isn't such a big part of the world..
Yeah, that's what the poster visualguy mentioned upthread. Japan being 16% of VXUS isn't significant.
Doesn’t mean that Japan can’t do well and become more significant part of VXUS.
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jason2459
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Re: ex-US Stocks Continue to Soar!

Post by jason2459 »

IMTM had a soaring day :mrgreen:
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
GoneOnTilt
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Re: ex-US Stocks Continue to Soar!

Post by GoneOnTilt »

S&P 500. All you need.
Da5id
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Re: ex-US Stocks Continue to Soar!

Post by Da5id »

If only there other place than this light hearted tongue-in-cheek thread to rehash truly tired and tiresome arguments. Alas, looks like this is it.

So Much Soaring :)
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Stinky
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Re: ex-US Stocks Continue to Soar!

Post by Stinky »

Everything I own was down today. Except for VTIAX (Vanguard Total International), which struggled to a small gain on the day.

I just hope that international outperformance continues.
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Re: ex-US Stocks Continue to Soar!

Post by pasadena »

Stinky wrote: Tue Sep 07, 2021 5:54 pm Everything I own was down today. Except for VTIAX (Vanguard Total International), which struggled to a small gain on the day.

I just hope that international outperformance continues.
Strangely enough, VXUS was down today.
Triple digit golfer
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Re: ex-US Stocks Continue to Soar!

Post by Triple digit golfer »

Stinky wrote: Tue Sep 07, 2021 5:54 pm Everything I own was down today. Except for VTIAX (Vanguard Total International), which struggled to a small gain on the day.

I just hope that international outperformance continues.
Ditto. My 32% VTIAX holding held its ground today. S&P 500 and Total Bond both fell.
Blue456
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Re: ex-US Stocks Continue to Soar!

Post by Blue456 »

Foreign stocks going nicely into the green today :).
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Re: ex-US Stocks Continue to Soar!

Post by abuss368 »

Backing up my rocketship!😂🤣

🚀
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Marseille07
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Re: ex-US Stocks Continue to Soar!

Post by Marseille07 »

abuss368 wrote: Fri Sep 10, 2021 12:05 pm Backing up my rocketship!😂🤣

🚀
Tony
You're doing a 3-funder again?
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jason2459
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Re: ex-US Stocks Continue to Soar!

Post by jason2459 »

Well, another green day for IMTM :beer
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Re: ex-US Stocks Continue to Soar!

Post by abuss368 »

Marseille07 wrote: Fri Sep 10, 2021 1:36 pm
abuss368 wrote: Fri Sep 10, 2021 12:05 pm Backing up my rocketship!😂🤣

🚀
Tony
You're doing a 3-funder again?
I shot into space with all stocks. The international stocks feel out the back of my rocket ship.

🚀
Tony
John C. Bogle: “Simplicity is the master key to financial success."
lostdog
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Re: ex-US Stocks Continue to Soar!

Post by lostdog »

soar ex-us... :beer
homebuyer6426
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Re: ex-US Stocks Continue to Soar!

Post by homebuyer6426 »

The Japanese blue chip stocks are doing well today. Sony, Hitachi, Itochu, Mitsubishi all up nicely.
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Re: ex-US Stocks Continue to Soar!

Post by Nathan Drake »

Some decent soaring this week
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Re: ex-US Stocks Continue to Soar!

Post by lostdog »

Nathan Drake wrote: Wed Oct 13, 2021 11:05 am Some decent soaring this week
:beer
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Re: ex-US Stocks Continue to Soar!

Post by Stinky »

Nathan Drake wrote: Wed Oct 13, 2021 11:05 am Some decent soaring this week
It's about time! :moneybag
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UpperNwGuy
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Re: ex-US Stocks Continue to Soar!

Post by UpperNwGuy »

Nathan Drake wrote: Wed Oct 13, 2021 11:05 am Some decent soaring this week
Glad I have 20% of my equities in international so I can share in the soaring.
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Re: ex-US Stocks Continue to Soar!

Post by FiveFactor »

Em Value:
7.3x P/E
3.2x P/CF
15.3% projected growth

S&P 500:
21.8x P/E
15x P/CF
13.3% projected growth

In the short run markets are a voting machine. In the long run, a weighing machine.
Small/Value/Profitability: | 30% AVUV | 30% AVDV | 30% AVES | Momentum: | 5% QMOM | 5% IMOM | Volatility: | 0.1% PUTW | Term: | 0.1% BND
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