Performance chasing is the only fallacy here.luckyducky99 wrote: ↑Mon Sep 06, 2021 5:33 pmI don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.
What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
ex-US Stocks Continue to Soar!
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Re: ex-US Stocks Continue to Soar!
Re: ex-US Stocks Continue to Soar!
Isn't all (cap weighted) index investing performance chasing?Triple digit golfer wrote: ↑Mon Sep 06, 2021 5:45 pmPerformance chasing is the only fallacy here.luckyducky99 wrote: ↑Mon Sep 06, 2021 5:33 pmI don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.
What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.
Even if you tilt to an under performong segement of the market, say SCV using an ETF like IJS, the stocks included in that fund are held at cap weight, so even within that tilt to an underperforming corner of the market, you are kind of performance chasing. The same is true for most international index funds/ETFs.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Re: ex-US Stocks Continue to Soar!
If you invest outside of world market cap, you're saying you know more than the market.
Performance chasers come up with all kinds of excuses.
VT and chill.
Performance chasers come up with all kinds of excuses.
VT and chill.
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Re: ex-US Stocks Continue to Soar!
World cap weighted is a neutral position, being the entire world stock market.marcopolo wrote: ↑Mon Sep 06, 2021 6:20 pmIsn't all (cap weighted) index investing performance chasing?Triple digit golfer wrote: ↑Mon Sep 06, 2021 5:45 pmPerformance chasing is the only fallacy here.luckyducky99 wrote: ↑Mon Sep 06, 2021 5:33 pmI don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.
What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.
Even if you tilt to an under performong segement of the market, say SCV using an ETF like IJS, the stocks included in that fund are held at cap weight, so even within that tilt to an underperforming corner of the market, you are kind of performance chasing. The same is true for most international index funds/ETFs.
By your logic, anything other than equal weight among every publicly traded company in the world would be performance chasing.
Re: ex-US Stocks Continue to Soar!
Agreed on all points. In a sense, it reminds me of the frustration with bonds since they are very likely to have real negative returns for the next ten years, yet there is a need to have them still (in my view). I believe the U.S. will continue to outperform until the next real bear market hits (not counting March 2020). After that, things could get interesting and I am one of the few who believes the debt and deficits are going to matter A LOT at some point.rwl10267 wrote: ↑Mon Sep 06, 2021 3:15 pmI think what puzzles many, certainly me, is Vanguard's insistence that 40% (or more, perhaps) of stock holdings be ex-US. I argued for a long time with the Vanguard rep over that position years ago and we ended up agreeing to disagree. I started with 25% (and cringed when I did), which has since been bled down to about 20% simply though ex-Us underperformance. The world is no longer like the 1970s. The EU is a mess, the world's second largest economy is a riddle wrapped in a mystery, and the USD is still the world's reserve currency. That last thought is the one that keeps me up at night: What happens when (not if) the world finally turns its back on USD hegemony in favor of, say, a basket of GDP-weighted currencies? That huge and artificial tailwind for the USD and the US economy by extension ceases, and the game entirely changes in many more ways other than stock valuations.You act like anybody who holds 20-40% in international stocks is making a 100% bet on international.
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Re: ex-US Stocks Continue to Soar!
Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
Last edited by Marseille07 on Mon Sep 06, 2021 7:33 pm, edited 1 time in total.
Re: ex-US Stocks Continue to Soar!
It is pretty shocking to realize that it was already at that level 33 years ago.Marseille07 wrote: ↑Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
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Re: ex-US Stocks Continue to Soar!
Yeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.visualguy wrote: ↑Mon Sep 06, 2021 7:32 pmIt is pretty shocking to realize that it was already at that level 33 years ago.Marseille07 wrote: ↑Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
Re: ex-US Stocks Continue to Soar!
Cap-weighted indexing is indeed by its very nature performance chasing as you explained.marcopolo wrote: ↑Mon Sep 06, 2021 6:20 pm Isn't all (cap weighted) index investing performance chasing?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.
Even if you tilt to an under performong segement of the market, say SCV using an ETF like IJS, the stocks included in that fund are held at cap weight, so even within that tilt to an underperforming corner of the market, you are kind of performance chasing. The same is true for most international index funds/ETFs.
Re: ex-US Stocks Continue to Soar!
Not so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.Marseille07 wrote: ↑Mon Sep 06, 2021 7:34 pmYeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.visualguy wrote: ↑Mon Sep 06, 2021 7:32 pmIt is pretty shocking to realize that it was already at that level 33 years ago.Marseille07 wrote: ↑Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
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Re: ex-US Stocks Continue to Soar!
No you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.visualguy wrote: ↑Mon Sep 06, 2021 7:50 pmNot so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.Marseille07 wrote: ↑Mon Sep 06, 2021 7:34 pmYeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.visualguy wrote: ↑Mon Sep 06, 2021 7:32 pmIt is pretty shocking to realize that it was already at that level 33 years ago.Marseille07 wrote: ↑Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
Re: ex-US Stocks Continue to Soar!
Just the top 5 stocks in the US stock market make up a larger percentage of VTI than the percentage of all Japanese companies together within VXUS. The effect of individual companies and stock markets is very diluted within VXUS.Triple digit golfer wrote: ↑Mon Sep 06, 2021 8:03 pmNo you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.visualguy wrote: ↑Mon Sep 06, 2021 7:50 pmNot so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.Marseille07 wrote: ↑Mon Sep 06, 2021 7:34 pmYeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.visualguy wrote: ↑Mon Sep 06, 2021 7:32 pmIt is pretty shocking to realize that it was already at that level 33 years ago.Marseille07 wrote: ↑Mon Sep 06, 2021 7:25 pm Nikkei above 30K, wow. Traders appear to welcome the election of LD Party leader who will become their next PM.
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Re: ex-US Stocks Continue to Soar!
I don't think you understand my point. In any stock market, only a small percentage of stocks are actually positive in a given period of time. You don't need a high percentage to be profitable. You just need a few to be really profitable. I'm saying the same principle applies in a world market fund. You don't need multiple markets to do well. You just need a few to do really well.visualguy wrote: ↑Mon Sep 06, 2021 8:35 pmJust the top 5 stocks in the US stock market make up a larger percentage of VTI than the percentage of all Japanese companies together within VXUS. The effect of individual companies and stock markets is very diluted within VXUS.Triple digit golfer wrote: ↑Mon Sep 06, 2021 8:03 pmNo you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.visualguy wrote: ↑Mon Sep 06, 2021 7:50 pmNot so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.Marseille07 wrote: ↑Mon Sep 06, 2021 7:34 pmYeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
Re: ex-US Stocks Continue to Soar!
Rooting for the underdog! I think I can smell and taste it but we will see.
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Re: ex-US Stocks Continue to Soar!
Yeah, I never really got the "performance chasing" slander, for any reasonable, diverse, buy-and-hold portfolio that doesn't involve moving in-and-out of positions. The whole case for global market cap weighting itself is that, by maximizing diversification among the equities asset class, it should theoretically maximize risk-adjusted performance (so the theory goes, anyways). So....marcopolo wrote: ↑Mon Sep 06, 2021 6:20 pmIsn't all (cap weighted) index investing performance chasing?Triple digit golfer wrote: ↑Mon Sep 06, 2021 5:45 pmPerformance chasing is the only fallacy here.luckyducky99 wrote: ↑Mon Sep 06, 2021 5:33 pmI don't think a reductio ad absurdum argument a fallacy. I don't necessarily agree with the specific reduction from region -> sector -> stock, but showing some premise logically leads to an absurd conclusion is a legitimate argument if the reduction holds water.
What do you see as the difference between sector risk and geographic/geopolitical risk that makes the first one worth diversifying but not the second one?
As a stock performs well, it gets bigger, and becomes a bigger part of your holdings.
And couldn't simply investing any portion of your portfolio into equities over bonds (or anything above the risk free line), be called "performance chasing"?
Anywho, looks like exUS will have a very nice start to the week. Best of luck to all.
Re: ex-US Stocks Continue to Soar!
What a fizzle. I guess Japan isn't such a big part of the world..
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Re: ex-US Stocks Continue to Soar!
IMO visualguy hits the nail on the head re: ex-US performance, or lack thereof. Each country component is subject to its own unique regulatory, fiscal, and market frictions with no synchronizing mechanism such that the whole can never be greater than the sum of its parts. If true, these inhibitions help to explain why ex-US has underperformed so dramatically over time. And with a 90% correlation with US stocks, one might legitimately wonder, "what's the point?" My own observation for the last many years is that the only real value provided by an ex-US portfolio is as an (imperfect) hedge against a falling dollar. As such, I have decided to allow my current 20% ex-US holding (VXUS) deteriorate into oblivion unless something dramatic occurs to alter the dynamic, like a change in reserve currency status. To holdouts, I offer that the namesake of this forum also believed that ex-US investments were not worth the time, effort, and incremental costs.visualguy wrote: ↑Mon Sep 06, 2021 8:35 pmJust the top 5 stocks in the US stock market make up a larger percentage of VTI than the percentage of all Japanese companies together within VXUS. The effect of individual companies and stock markets is very diluted within VXUS.Triple digit golfer wrote: ↑Mon Sep 06, 2021 8:03 pmNo you don't. Just as only a small percentage of stocks contribute to the market's return, you can have only a few markets do well and have the entire index perform well.visualguy wrote: ↑Mon Sep 06, 2021 7:50 pmNot so much because Japan is only 15.5% of ex-US. You have to bundle all European countries with Japan to get to something that's over half of ex-US... That's one of the problems with it. There's so much stuffed in there that you need many stock markets to do well for it to do well.Marseille07 wrote: ↑Mon Sep 06, 2021 7:34 pmYeah, and they're still 30% away from ATH; though at this point, finally renewing ATH seems possible. Ex-US would do well in that case.
Re: ex-US Stocks Continue to Soar!
Doesn’t mean that Japan can’t do well and become more significant part of VXUS.Marseille07 wrote: ↑Tue Sep 07, 2021 9:42 amYeah, that's what the poster visualguy mentioned upthread. Japan being 16% of VXUS isn't significant.
Re: ex-US Stocks Continue to Soar!
IMTM had a soaring day
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: ex-US Stocks Continue to Soar!
S&P 500. All you need.
Re: ex-US Stocks Continue to Soar!
If only there other place than this light hearted tongue-in-cheek thread to rehash truly tired and tiresome arguments. Alas, looks like this is it.
So Much Soaring
So Much Soaring
Re: ex-US Stocks Continue to Soar!
Everything I own was down today. Except for VTIAX (Vanguard Total International), which struggled to a small gain on the day.
I just hope that international outperformance continues.
I just hope that international outperformance continues.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
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Re: ex-US Stocks Continue to Soar!
Ditto. My 32% VTIAX holding held its ground today. S&P 500 and Total Bond both fell.
Re: ex-US Stocks Continue to Soar!
Foreign stocks going nicely into the green today .
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Re: ex-US Stocks Continue to Soar!
Backing up my rocketship!
Tony
Tony
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Re: ex-US Stocks Continue to Soar!
Well, another green day for IMTM
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: ex-US Stocks Continue to Soar!
I shot into space with all stocks. The international stocks feel out the back of my rocket ship.
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John C. Bogle: “Simplicity is the master key to financial success."
Re: ex-US Stocks Continue to Soar!
soar ex-us...
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Re: ex-US Stocks Continue to Soar!
The Japanese blue chip stocks are doing well today. Sony, Hitachi, Itochu, Mitsubishi all up nicely.
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Re: ex-US Stocks Continue to Soar!
Some decent soaring this week
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: ex-US Stocks Continue to Soar!
It's about time!
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Re: ex-US Stocks Continue to Soar!
Glad I have 20% of my equities in international so I can share in the soaring.
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Re: ex-US Stocks Continue to Soar!
Em Value:
7.3x P/E
3.2x P/CF
15.3% projected growth
S&P 500:
21.8x P/E
15x P/CF
13.3% projected growth
In the short run markets are a voting machine. In the long run, a weighing machine.
7.3x P/E
3.2x P/CF
15.3% projected growth
S&P 500:
21.8x P/E
15x P/CF
13.3% projected growth
In the short run markets are a voting machine. In the long run, a weighing machine.
Small/Value/Profitability: |
30% AVUV |
30% AVDV |
30% AVES |
Momentum: |
5% QMOM |
5% IMOM |
Volatility: |
0.1% PUTW |
Term: |
0.1% BND
Re: ex-US Stocks Continue to Soar!
If this keeps up I'll be able to front load 2022 VXUS @ Jan. 4, 2021 prices... silver lining?
Re: ex-US Stocks Continue to Soar!
Another fresh 52 week low for VWO today.
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Re: ex-US Stocks Continue to Soar!
It's noteworthy how much Bridgewater is invested in Emerging Markets. According to their 9/30/21 13f, their three top holdings are:
VWO Vanguard FTSE Emerging Mark...6.42%
EEM iShares MSCI Emerging Index...5.56%
IEMG iShares Core MSCI Emerging ...4.65%
Re: ex-US Stocks Continue to Soar!
Keep in mind, the dividend distribution is partially to blame for today's price adjustment. It just makes it more clear how little progress there was this year in price appreciation.
Re: ex-US Stocks Continue to Soar!
Yes, VSS has a $2.51 dividend happening today or about 1.9% of NAV. VFSAX was last week.
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Re: ex-US Stocks Continue to Soar!
Nikkei +2% despite US going red. I must say Nathan Drake was correct all along.
Re: ex-US Stocks Continue to Soar!
Seems like XUS should get bumped for soaring today.
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Re: ex-US Stocks Continue to Soar!
We'll need several years of international outperforming U.S. to catch the other thread's 406 pages.
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Re: ex-US Stocks Continue to Soar!
Isn't this thread title a Boglehead's oxymoron?
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Re: ex-US Stocks Continue to Soar!
I'm still young. I have time. If it happens by the time I retire, I'll be a very happy man.Triple digit golfer wrote: ↑Tue Jan 11, 2022 3:34 pm We'll need several years of international outperforming U.S. to catch the other thread's 406 pages.
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Re: ex-US Stocks Continue to Soar!
I don't care which outperforms. I own more U.S. and live here,, so I suppose I'd rather the U.S. do better.dboeger1 wrote: ↑Tue Jan 11, 2022 3:51 pmI'm still young. I have time. If it happens by the time I retire, I'll be a very happy man.Triple digit golfer wrote: ↑Tue Jan 11, 2022 3:34 pm We'll need several years of international outperforming U.S. to catch the other thread's 406 pages.
International stocks will outperform US stocks in 2022
[Thread merged into here --admin LadyGeek]
My predecessors were all defeated but I will be right!
International spent all of 2021 refueling the rocket ship
Good luck beating international again with more than 50% higher forward PE domestic stocks!
My predecessors were all defeated but I will be right!
International spent all of 2021 refueling the rocket ship
Good luck beating international again with more than 50% higher forward PE domestic stocks!
Re: International stocks will outperform US stocks in 2022
Riiiighttt....
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)