SalvorHardin wrote:Lootman wrote:It proves as much as Ohno cherry-picking them as his two examples of US shares doing badly.
I am still waiting for the answer to my question about why the UK is likely to out-perform the US in any time period going forward? I just do not see it.
I can see the UK stockmarket outperforming the NYSE for a year or two if and when the market decides that UK multinationals are cheap. Moreso if the NYSE has a relatively poor year.
There is scope for UK company valuations to rise further if they move their headquarters from Britain to America and their primary stockmarket listing from London to Wall Street. I'm convinced that Diageo is moving soon; America is its biggest market by far and it recently switched its reporting currency to US dollars.
It won't last for long though because the UK has many problems that America does not, notably vastly higher energy prices, an increasingly hostile attitude towards business (and agriculture), NIBMY policies running riot to stop all sorts of development, ruinously high residential property prices (by government diktat) and an increasingly lazy low skilled population that thinks that the world owes it a living.
Anyone who thinks the US is a pure capitalist economy was clearly asleep during the housing crisis when the state owned mortgage companies aided and abetted Wall Street in a giant ponzi scheme. A similar process is underway now with debt backed executive share option schemes.
Don't get me wrong, the US is very entrepeuneurial and has many great businesses. But it's in the price and mortgaged up to the eyebrows.
Its constitution is no longer fit for purpose and is leading to stasis. Moreover, the US is abusing its position as the world's reserve currency. One day that will go wrong. It won't be tomorrow, probably not next week or in my lifetime.
Look, I am as much in despair at the state of the UK economy as anyone else, but looking around I don't see many better alternatives except maybe Australia. Europe has locked itself into a rigid exchange rate that is entirely unsuitable for its many different polities. That will break at some point. Again, I have no idea when, but it will happen.
I have just finished a book about the end of enlightenment when many smart writers eulogised the French revolution and write off Britain.
As time progressed, and they admitted their mistake, there was a grudging acceptance that the Britain's ability to muddle through without a grand plan seemed to work ok.
It seems to me that we just have to accept that the three driving forces of economic growth, and hence asset prices, over the last two centuries are coming to end.
Technology, booming population and falling energy costs raised living standards for 200 years.
Technology is still improving but not in the dramatic life-changing it has since the early 1800s.
Population growth is slowing and will soon turn negative on a global basis. If nothing else that simply reduces the addressable market for business.
Most importantly energy costs are rising in the developed world because of daft net zero policies. Cheaper energy has been the main driver of rising living standards since coal was widely adopted. Chasing more expensive alternatives in pursuit of an unrealistic goal will hurt consumers, economies and asset prices. If people are really worried about carbon emissions they need to tell one billion Indians they are never going to get air conditioning. Forcing people to buy EVs that last for half the time of an ICE won't do it.
As ever in investing it is about what offers a good return for the price rather than a global macro-overview.