I'm a little baffled by all the US value investors mulling what they can do now that the S&P is pretty clearly in speculative territory. Crazy idea but... look elsewhere?
UK stocks are super cheap. The FTSE100 has grown earnings 200% since 2005, versus the S&P's 300%; and yet is up just 70-80%, versus the S&P's 500%. That means >80% of the outperformance has been multiple expansion.
There are some fantastic opportunities in emerging markets too. Or even sticking in the US, as long as you're willing to wade into small cap.
At a high level, value investing is not very complicated. Buy undervalued things, sell overvalued things. If you REALLY can't find anything undervalued, cash is fine - you're probably near a top anyway.
That's where I operate (small and micro). The problem with emerging markets is that they never emerge. EU has just made it difficult to be an investor. They are not business friendly which is why so many EU companies list on the American exchanges
Regarding emerging markets, I'm not suggesting buying the whole index. Just that there are some great opportunities out there. But to be fair, while EM has underperformed the US overall throughout history, it hasn't underperformed massively, and periods of underperformance (such as the last 15 years) have typically been followed by periods of outperformance. Gotta be careful not to succumb to recency bias on these things.
I think investing abroad in any capacity is just tough. So many Western governments are just collapsing and can't agree on anything (see France, Germany, and the UK). I have one Polish company listed on the AMS and has done phenomenally well fundamentally on virtually all KPIs. The stock has gone almost nowhere all year. It's incredibly frustrating.
I wouldn't lump the UK government in with France and Germany on that one. Labour won an absolute landslide and seem to be fairly well-united.
Moreover, the country as a whole does not need to do well for a company to do well. The point I'm trying to make is there are excellent companies in each of these places, whose growth is not very dependent on GDP growth. Also, on the macro side - you've gotta remember the US is the only country in the world with mortgages fixed for their entire duration, so interest rate hikes have much less of an effect there.
I don't understand being frustrated at a stock not moving for a year when the business is doing well. If the business has exceeded your expectations and the stock hasn't gone up, it's more undervalued now than it was then - that's the best possible scenario! If it hasn't exceeded expectations, why should it go up (in excess of the 7% or 8% that equity investors demand)? We know the market is a voting machine in the short term and a weighing machine in the long term - that's why we're able to outperform the market if we're smart.
Out of curiosity, are you willing to share the name of said Polish company?
Yea but from what I understand from those that live there, the Labor party won but much of their policies overlap with the previous government but with a new "twist" on things.
UK IPO market also #7 now in the world? Terrible place to even go public.
And yea people have been advocating those countries using the exact same examples you have but it's not really changing anything. German manufacturing and energy are down the tubes. France is dealing with its recent fallout and a possible move to the far right. Italy moving to the far right and all of those countries are dealing with internal issues with labor and immigrants. Total chaos.
And yea I get your point but investors want returns. Things need to move at least in the direction they're supposed to if they're doing well. I'm also not implying it should be rocketing up right now but when I mean it's gone nowhere I mean it's literally gone nowhere. I think I'm up ~1% right now? Very annoying.
It's InPost (AMS: INPST). Stellar company that's absolutely killing it but the stock is just not moving.
I'm from the UK. You're correct that Labour and the Tories aren't worlds apart politically, and I think that's a good thing. Certainly a more stable political landscape than exists in the US. The Tories made some poor choices, including austerity following the GFC when in hindsight the best move would have been to borrow and invest; and the Brexit referendum which was a horrible idea even without the benefit of hindsight. Labour are certainly more willing to do so and announced plans to lift borrowing limits. But I don't want to get into the weeds of the macroeconomics - the point I'm making is it's a stable regime, a stable economy, with low valuations, and some great opportunities scattered around. Who cares that not many companies are IPOing there? Irrelevant.
On InPost - I'm not really sure you do get my point. "Investors want returns" - investors being you? If you aren't happy waiting a year to get your returns, you're a trader, not an investor. Stocks don't always move steadily up and to the right. That's life, that's Mr Market. THAT'S A GOOD THING. Just buy more. If you're right about it you'll do even better.
But also... the 1Y return on InPost is 30%. To be flat, the earliest you could have bought in is like 7 months ago. If you shit the bed about the stock not going up over a 7 month timeframe... come on man.
Thank you for the insightful article! I personally think there is a need for more clarity on Trump’s stance regarding Bitcoin and cryptocurrency. It’s baffling that he doesn’t seem to grasp how every dollar funneled into Bitcoin is a dollar diverted from productive investments that could benefit the broader economy. Beyond that, the real-world utility of crypto and blockchain right now seems limited to speculation and, unfortunately, facilitating illicit activities like money laundering. While blockchain tech has potential, its current misuse often overshadows any legitimate benefits.
Yea I'm bullish on blockchain but not crypto. I think Trump just said whatever he needed to say to get elected and now he has to follow up on these claims and promises.
I'm a little baffled by all the US value investors mulling what they can do now that the S&P is pretty clearly in speculative territory. Crazy idea but... look elsewhere?
UK stocks are super cheap. The FTSE100 has grown earnings 200% since 2005, versus the S&P's 300%; and yet is up just 70-80%, versus the S&P's 500%. That means >80% of the outperformance has been multiple expansion.
There are some fantastic opportunities in emerging markets too. Or even sticking in the US, as long as you're willing to wade into small cap.
At a high level, value investing is not very complicated. Buy undervalued things, sell overvalued things. If you REALLY can't find anything undervalued, cash is fine - you're probably near a top anyway.
That's where I operate (small and micro). The problem with emerging markets is that they never emerge. EU has just made it difficult to be an investor. They are not business friendly which is why so many EU companies list on the American exchanges
What about the UK?
Regarding emerging markets, I'm not suggesting buying the whole index. Just that there are some great opportunities out there. But to be fair, while EM has underperformed the US overall throughout history, it hasn't underperformed massively, and periods of underperformance (such as the last 15 years) have typically been followed by periods of outperformance. Gotta be careful not to succumb to recency bias on these things.
I think investing abroad in any capacity is just tough. So many Western governments are just collapsing and can't agree on anything (see France, Germany, and the UK). I have one Polish company listed on the AMS and has done phenomenally well fundamentally on virtually all KPIs. The stock has gone almost nowhere all year. It's incredibly frustrating.
I wouldn't lump the UK government in with France and Germany on that one. Labour won an absolute landslide and seem to be fairly well-united.
Moreover, the country as a whole does not need to do well for a company to do well. The point I'm trying to make is there are excellent companies in each of these places, whose growth is not very dependent on GDP growth. Also, on the macro side - you've gotta remember the US is the only country in the world with mortgages fixed for their entire duration, so interest rate hikes have much less of an effect there.
I don't understand being frustrated at a stock not moving for a year when the business is doing well. If the business has exceeded your expectations and the stock hasn't gone up, it's more undervalued now than it was then - that's the best possible scenario! If it hasn't exceeded expectations, why should it go up (in excess of the 7% or 8% that equity investors demand)? We know the market is a voting machine in the short term and a weighing machine in the long term - that's why we're able to outperform the market if we're smart.
Out of curiosity, are you willing to share the name of said Polish company?
Yea but from what I understand from those that live there, the Labor party won but much of their policies overlap with the previous government but with a new "twist" on things.
UK IPO market also #7 now in the world? Terrible place to even go public.
And yea people have been advocating those countries using the exact same examples you have but it's not really changing anything. German manufacturing and energy are down the tubes. France is dealing with its recent fallout and a possible move to the far right. Italy moving to the far right and all of those countries are dealing with internal issues with labor and immigrants. Total chaos.
And yea I get your point but investors want returns. Things need to move at least in the direction they're supposed to if they're doing well. I'm also not implying it should be rocketing up right now but when I mean it's gone nowhere I mean it's literally gone nowhere. I think I'm up ~1% right now? Very annoying.
It's InPost (AMS: INPST). Stellar company that's absolutely killing it but the stock is just not moving.
I'm from the UK. You're correct that Labour and the Tories aren't worlds apart politically, and I think that's a good thing. Certainly a more stable political landscape than exists in the US. The Tories made some poor choices, including austerity following the GFC when in hindsight the best move would have been to borrow and invest; and the Brexit referendum which was a horrible idea even without the benefit of hindsight. Labour are certainly more willing to do so and announced plans to lift borrowing limits. But I don't want to get into the weeds of the macroeconomics - the point I'm making is it's a stable regime, a stable economy, with low valuations, and some great opportunities scattered around. Who cares that not many companies are IPOing there? Irrelevant.
On InPost - I'm not really sure you do get my point. "Investors want returns" - investors being you? If you aren't happy waiting a year to get your returns, you're a trader, not an investor. Stocks don't always move steadily up and to the right. That's life, that's Mr Market. THAT'S A GOOD THING. Just buy more. If you're right about it you'll do even better.
But also... the 1Y return on InPost is 30%. To be flat, the earliest you could have bought in is like 7 months ago. If you shit the bed about the stock not going up over a 7 month timeframe... come on man.
Thank you for the insightful article! I personally think there is a need for more clarity on Trump’s stance regarding Bitcoin and cryptocurrency. It’s baffling that he doesn’t seem to grasp how every dollar funneled into Bitcoin is a dollar diverted from productive investments that could benefit the broader economy. Beyond that, the real-world utility of crypto and blockchain right now seems limited to speculation and, unfortunately, facilitating illicit activities like money laundering. While blockchain tech has potential, its current misuse often overshadows any legitimate benefits.
Yea I'm bullish on blockchain but not crypto. I think Trump just said whatever he needed to say to get elected and now he has to follow up on these claims and promises.
Not to mention DOGE and the impact that will have