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Now Everyone Loves International Stocks? | Net Profit Margins and Valuation Still High?

By Derek Moore

February 15, 2023

 Show Summary:

 Derek Moore is back with Mike Puck, Director of Business Development at ZEGA Financial to talk underperformance of international stocks and how “everyone” is saying this is the year that trend gets reversed. Mike shares what people were talking about at the Miami ETF Conference around flows into international funds to start the year. Plus, they talk about what investors give up if they rotate out of S&P 500 US type investments and how you might already have international exposure in large US companies. Finally, they discuss the consensus for the US Dollar to drop in 2023 along with some other odds and ends within markets and the economy. 

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 Topics Include:

  • Why we don’t try and pick markets and instead just Buy and Hedge!
  • Comparing the performance of international stocks and value stocks
  • Relative underperformance for over a decade in international stocks
  • Is 2023 the year international finally outperforms again?
  • Spain’s IBEX Index price (not including dividends) is the same as it was in 1997-98
  • Makeup of stocks within the S&P 500 Index vs some international indexes
  • Looking at the top 100 companies worldwide by market cap
  • John Hussman Price/Sales ratio chart 
  • Price to sales still higher than average – although margins remain higher than average
  • Market may be assuming net profit margins will stay elevated
  • Google searches for Soft Landing are up
  • Comparing the Nominal GDP growth to the 10-Year Treasury yield
  • Early 90s Emerging Markets dominance
  • International stock indexes have less technology and more value type stocks 

 Mentioned in this Episode:

 No Volmageddon 2.0 | No Landing for the Economy? 

John Hussman article on current valuations 

 Jay Pestrichelli’s book Buy and Hedge 

 Derek’s new book on public speaking Effortless Public Speaking 

 Derek Moore’s book Broken Pie Chart