An investor is moving 75% of his portfolio out of U.S. stocks, expecting the market to be flat for a decade then enter a 10-15 year decline. He's buying Asian and European companies trading at single-digit P/E ratios, requiring at least 50% of revenue from outside the U.S.
My big theme over the last 6 months, and I've been saying this over and over, if you're just in SPY or in the NASDAQ and you think you're diversified because you're in an index fund, you're not. Because I believe the US is going to go flat for the next decade. It doesn't matter how good the company is. If the broader market is registering multiple contraction, you can't outrun it. So I have been massively transitioning my US holdings into Asian, European, and also the only companies I invest in have at least 50% of their business abroad because I think the US is about to go into a 10 or 15 year down cycle. But I think The rivers are about to reverse in terms of capital flows, and we're going to see a massive outflow of capital. And the market I like the most is Europe, because if you ask anyone about Europe, they just roll their eyes and go, "Oh no, they're fucked. It's a museum. It's overregulated." That's when you invest, is when something's been left for dead. There are really good companies in Europe trading at single-digit P/E. In terms of public stocks, I'm going to be almost entirely out of the US market within 3 or 4 months.
