Saw one of my old clients last week and was asked a few ordinary questions 1.Thé concentration of the U.S. equity market component. In France ,Germany and most of the developed countries,the largest stock represents more than 20% of the index In the U.S. ,the largest is 7-8% of the total . 2.The cyclical adjusted PE has reached at the historical high . Back in 2018,one of the European managers expressed the negative views of the U.S. equity on this yardstick .They were sure the U.S. equity was about to go down in a few years . The cyclical PE has reached it historical high in 2014. Then one could have missed the best equity market move in the U.S. for a decade ! Since 2009,the most important is to understand FED’s move . ‘LIQUIDITY’! If one likes it or not ,that is how things are done ✔️. The macro reading is 100X more important than valuation matrix . Most academics were super frustrated and express anger .
Russell Napier is one of the best.
The more important the message, the fewer will be the amount of people that understand it.
Saw one of my old clients last week and was asked a few ordinary questions
1.Thé concentration of the U.S. equity market component.
In France ,Germany and most of the developed countries,the largest stock represents more than 20% of the index
In the U.S. ,the largest is 7-8% of the total .
2.The cyclical adjusted PE has reached at the historical high .
Back in 2018,one of the European managers expressed the negative views of the U.S. equity on this yardstick .They were sure the U.S. equity was about to go down in a few years .
The cyclical PE has reached it historical high in 2014.
Then one could have missed the best equity market move in the U.S. for a decade !
Since 2009,the most important is to understand FED’s move .
‘LIQUIDITY’!
If one likes it or not ,that is how things are done ✔️.
The macro reading is 100X more important than valuation matrix .
Most academics were super frustrated and express anger .