Uncertainty, usually you can run to dividends, but they are not doing it today.
Also, the s&p hitting a record high yesterday.
Maybe a bit of pause in trading.
We talk a lot about the fed and ben bernanke, but what about overseas?
Our next guest is putting his money it over the atlantic.
When we have the s&p trading at a near record, you are trading overseas, why is that?
It has been outperforming everything but if you look at valuations, u.s. stocks are a little expensive.
A little overvalued, but not like the 1990's. the u.s. is the third most expensive.
At 16 times earnings.
We look at it at a much longer time perspective.
10 years out.
If you look at that, most of the world, and especially europe, a lot of europe is trading near seven.
It is all of these countries -- it is really hard to buy.
It makes you nauseous.
Is there a reason why they are cheap?
The old wall street phrase, by when there is blood on the street.
Still a lot of risk, but we think there is a lot of opportunity in building the base for secular lows in the next 10, 15 years.
How do you allocate money to countries like that which are so difficult?
You could buy with a three to five-year time horizon, hold your nose and possibly buy more on the way down.
That is tough to do.
Here are the way to avoid a falling knife, we look to buy what it is cheap -- what is cheap once it has started to turn positive.
We will look to get more and more invested in these countries.
The first and last 10% of the most expensive in the world.
You did not catch the bottom, but you get on when it is moving up.
You could have bought greece when they went down to 50, but then it went down to 90. a lot of people are trying to find a bottom in gold stocks.
You cannot time this on a month time frame or quarter, it is really to be to five years down the road.
Looking at greece, ireland, argentina, belgium.
How do you allocate and by in these countries?
Etf's is a good way.
Some of those countries it is almost impossible to allocate to size.
Greece, argentina, colombia as well.
Almost impossible with these etf's. there are broader ford etf's. all of those would be good, liquid options to invest in.
It comes back to your allocation, you have a fixed amount of capital.
How do you determine how much to allocate to the different countries?
Most investors around the world have the home country bias.
That is a big mistake.
If you look at the u.s. on total market cap, it is only half the world.
On the gdp basis, down a third.
You could make the argument that, at the most, he should have had your allocation in the u.s., maybe one third, and then when you look about you wish it on top of that, maybe even a quarter.
You look at what have as -- what has happened in japan.
They have gone nowhere.
What about the sector's looking at these countries, early cyclical, late-cycle stocks?
We focus mostly in the u.s., and we apply the same metric standards.
On the one hand you have financials.
On the other side you have consumer discretionary, long- term peace/be's in the 20's. while everything -- p /e's in the 20's. we have been getting out of real estate.
Our macro funds are 60% cash now.
A lot of that is commodities are to be real estate.
The u.s. has been one of the rare for a stand-up performers this year.
-- rare standout performers this year.
U.s. is a little expensive right now at 16 times earnings, so he is looking abroad, putting money elsewhere.
Favorite country for value and safety, belgium.
He also likes argentina, russia.
Looking forward to getting more of his ideas.
Lunch money is just getting started.
We are talking about oil.
We will see if it can continue to climb.
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