For work, I do that every month. Currently, all sectors in the UK trade at significant discounts to the US except healthcare, industrials and technology and the market overall trades at a 26% discount to the US when adjusted for different sector-exposures.
do you also adjust for growth, profitability and earnings volatility differences of regions? US has historically been more consistently profitable (ROE) and with lower volatility than other regions. just another consideration. perhaps adjusted the valuation gap between regions narrows quite a bit
my preferred simple explanation for US outperformance was the higher and faster US growth vs the EU. Is there any paper about this?
As far as I am concerned the US is also easier for people to understand vs French or German industrials (who all seem to mostly rely on US companies for cloud computing, and 100% of them rely on them for mobile app-stores).
Interesting angle of analysis but only really useful when done on a sector-neutral basis. Would that be feasible ? ;)
For work, I do that every month. Currently, all sectors in the UK trade at significant discounts to the US except healthcare, industrials and technology and the market overall trades at a 26% discount to the US when adjusted for different sector-exposures.
do you also adjust for growth, profitability and earnings volatility differences of regions? US has historically been more consistently profitable (ROE) and with lower volatility than other regions. just another consideration. perhaps adjusted the valuation gap between regions narrows quite a bit
No I don’t. There is only so much I can torture the data before things get silly 😃
my preferred simple explanation for US outperformance was the higher and faster US growth vs the EU. Is there any paper about this?
As far as I am concerned the US is also easier for people to understand vs French or German industrials (who all seem to mostly rely on US companies for cloud computing, and 100% of them rely on them for mobile app-stores).