Dare Forward
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Trade in Whisky;
It is no great surprise that I am finding good value in the UK and Europe, more so than in the US. This chart says it all. I have seen most charts at some point, but never this one before. It cleverly estimates how exposed foreigners are to US equities using Federal Reserve data. The answer is that foreigners are all in, just as they were 23 years ago.
![](https://www.bytetree.com/content/images/2023/09/2023-09-19-tmai-44-1.png)
It is logical that a country’s stockmarket valuation would be heavily influenced by foreign capital flows. After all, it is always the case that some country’s stockmarkets are cheap, while others are expensive. Currently, the USA is expensive, while the rest of the world offers better value.
I heard that young Koreans have no chance of buying a house, so they buy the Nasdaq instead. If you take the 80-year average exposure to be 40%, meaning foreigners own 40% of US equities. As shown in the chart above, they are currently at 57.3%. This was last seen in 2000 during the dotcom boom and never before.
That means 20% of the world’s ex-US investment funds have been diverted, which explains the cheapness of European and Asian markets. This is why we find cheap companies outside the US more easily than inside. Here is another.
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