| | | "Inevitable" is a strong word. Just look at my home country - the UK. The FTSE 100 was just as good as the S&P 500 prior to the GFC. Fifteen years later, we're still in no man's land returning about 20% in 17 years (exc dividends). That's downright awful when you consider we also benefited from QE, ZIRP...
The other fact is that US enterprise developed, improved and went clear, especially in tech, whilst London clutched to its services sector to do its bidding for the rest of the UK. In addition, you've got very capable individuals and benefit from wonderful geographical conditions... The world relies on you and, more, they still trust America and that's why I pay a premium for US stocks. I sure wouldn't want to bet against the US in the next century.
Chinese stocks are cheap, sure, but I think it's better if the West just shrug their shoulders and bet on themselves. There's only so much growth that companies like Baidu and Alibaba can achieve. With the CCP also breathing down their shoulders, I just don't think it's worth the risk or time. China isn't the land of innovation or freedom; America is. Multiples should stay low, upon reflection.
I'd bet on Amazon and Google if I had to, but because their valuations are somewhat expensive, you, just like I, are tempted to buy into something cheaper looking. An element of desperation for value investors in this market? I think so.
Japan's another example of an economy that took forever to recover. In essence, why will China and its stock market recover quickly and why do you think 13x earnings for BABA is reasonable? |
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