I wouldn't disagree with you... I just think you need to consider carefully what happens under a Japan scenario. See what happened to such a "portfolio" through the last 20 - 30 years of the Japanese experience. If you're happy with this as a "tail"(ish) risk, then you got yourself a trade.
http://www.bloomberg.com/news/artic...rclays-says-european-stocks-are-a-buy-in-2016 A lot of people love European equities due the low PE, but couldnt the market be there because expected growth rates (due stagnation) be very low right now?
Brazilian stocks are up a ton this year (new multi-year high today highest since april 2012) but I still think they are very cheap. Where in the world can you own stocks with a 10 CAPE ratio with a government implementing all the important reforms and with a even better government likely to take over in 2018 (implementing other important reforms or making the sure the old ones that failed, pass)? This was a classic Jim Rogers type investment, where he would load up a depressed market when he saw that the government was about to make the necessary market friendly reforms (IIRC he made 5x his investment in Austria in the 80's doing just that). I believe the Bovespa could be at 90K+ somewhere in 2018, during an election hype rally
The higher the valuation (the lower the expected real return going forward), the higher the chance of a significant drawdown in the stock market http://mebfaber.com/2012/11/30/hercules-hercules/ Kinda obvious but its nice to see that data to back it all up
With central banks forcing certain country's stock markets to trade at a premium, you have to diversify globally to find value
Greece CAPE ratio is around 2-4. I avoided Greece for years because of EUR denomination risk (in case they get out of the EUR), but its getting so ridiculously low it might be worth a initial investment (with the plan to add a lot more if they get out). If you think about it, if they walk out, the new currency probably will drop 50-60% but then their stock market should rally 5-10 fold over the coming years, so you will make it all back anyway The Greek index is down from 1000 in 2008 to a low of 15 this year (a drop of over 98%) I'm considering a small stake in GREK. Anywhere from a 1% to 3% position The fact that no one can see a catalyst for them, is probably even more of a reason to buy
Even with a small position, the potential is huge. When these depressions end the rallies are just humungous, it takes everyone by surprise
Not sure wether this has already posted, but below is an link to world map and CAPE ratios to many countries : http://www.starcapital.de/research/stockmarketvaluation
It could be. But employment started to go up, real GDP is flat and there is a primary surplus. It looks like the worst is over. So it SHOULD limit the downside, if GREK makes a new low, I can get probably get out. If there is a comeback, this make will triple easily. So its a big reward to risk ratio