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 .
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.