Why do you think that?
It is of all the support from the ecb?
What is going to draw these european stocks higher?
Two things are going to help.
One, on a fiscal drag basis, the governments collectively are in better shape than they were.
They are not getting worse, and a sense.
The french and spanish economies are basically flat at this point , a vast improvement over where they have been.
The fiscal drag should be less.
The monetary drag should also be less.
We think there is going to be a bit more monetary stimulation.
The central bank putting more money into the system.
The ltr oh, they have been taking money out of the system for year-and-a-half.
Just a quick that, have a better fiscal balance, i think that europe is in better shape.
Following up, if you think there will be less support from central bank and from government , what if the fed tapers?
How was i going to affect monetary policy decisions in europe?
Europeans are going to be a little bit concerned that if we taper and our interest rates go up, that will make the dollar more attractive.
But that will in turn pushed down their currency.
I do not think they will be upset about it.
They are generating their own liquidity.
They are not like an emerging market living on the excess liquidity of the western world that sloshes in and out of their economy.
I think that europe can take care of itself in the context.
Julie, you have been looking at one particular company?
Yes, this is a provider of mobile payment security.
If you look at how cards are structured in the european union and europe generally, rather than finding for them, you enter a pin, you have the sim card inside, the security is within the card itself.
Here is how they have done, year to date, amsterdam at 20%, outpacing a little bit that stoxx 600. you would think that this would be a big growth area and i did not know a lot about the company, but i started to look at revenue growth over the last couple of years, estimated it is not huge considering what one would think is the potential for this sort of thing, especially given some of the problems we have had with payment security as evidenced by the recent situation at target.
Z you see any -- as julie just mentioned, an amsterdam- based company that we heard earlier about, some of the european practices may be imported here to the u.s.. how much here is technology a part of your thesis for european stocks going higher in the new year?
Not particularly the thesis itself, but we think they are particularly attractive and the flip side of this discussion about targets and the magnetic cards, the information getting swiped, it is harder to swipe information off a card with a chip embedded in it.
And then you also have to put in a pin.
Has anybody ever checked the signature on your credit card?
We are a floppy system and there are 80 countries around the world using the chip and pin technology.
It has just now been introduced into china, it is just now coming into this country.
We are kind of behind the pace, so these could be good years for the chip does this and cards.
They also make the chips in the cell phones that you can use for electronic transactions.
We think that the estimates are too low going forward, particularly from this country, where all of a sudden we are waking up that we have got to do something to catch up.
We were supposed to roll this technology out between now and 2000? we think that that is going to be accelerated.
From europe to japan, scarlet, i know you are looking at the caterpillar of japan?
The world's number two maker of construction equipment, their stocks have actually outperformed most global competitors, primarily because they get a boost from the weak yen, but the reason to be bearish is global.
Demand is depressed with cuts to spending plans.
The weekend can only help so much.
We have not talked much about asia.
We have focused primarily on europe.
The japanese caterpillar, as we call it, would obviously be up play on raising growth in asia.
We just think of that is a bounceback, in a sense.
Caterpillar is one of the great well-run companies of the world.
We also like to mock soup --, two -- kamatsu.
If you do a chart overlaying them, their trends have been the same.
We think that the worldwide economy, as it expands mining is going to do better than people think it will.
It will not be the boom days from several years ago, commodities will not be going through the ceiling, but we think that it has a three percent yield with a seven percent p/e ratio, so we think it is a good comeback candidate.
Jim, thank you for your time, your thoughts and ideas there.
Jim joins us there from scout investments.
When we come back, the for your hot streak at apple compared to the s&p 500 has ended.
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