The U.S. stock market will return less than the MSCI World over the next 10 years. Tech, and by this I mean especially emerging tech companies, will be outperformed by the most boring value companies.
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•Deleted User
2Yr
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2Yr
@Bringelschlaechter the statement does not make sense or do I understand it wrong? First paragraph you say msci world performs better than USA. Second paragraph you say: the boring value companies (in msci world) outperform EM tech stocks. So huh?
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The fair value of a company is determined by the discounted cash flows. Due to the monetary policy of the Fed and the ECB, the value of future cash flows has risen sharply in recent years. Relevant here is above all how the monetary policy has changed. We have now reached an end here. No one expects further easing. The central banks also know what impact their policies have on the capital market and do not want to provoke a crash and stretch this out over a longer period of time. But whatever the tapering measures look like they will hit tech harder than value.@IfaqIn addition, the valuation is simply too high to invest any further. The stock market is not about finding companies that are great but about finding companies that are mispriced. Of course, you can also look at the story and be successful with it. There have always been phases in which Europe has performed better than America and vice versa. American companies have developed better in the last ten years, which partly explains the development. The market tends to exaggerate. The valuation of the large tech companies is still understandable. But for many of them, this is no longer the case. I also have both in my portfolio.@Fzephyr1 Emerging tech means emerging technology companies with low sales and mostly without profits. But they have a valuation as if they were already the next Google. In other words: MSCI World ex USA > MSCI USA. Value > Growth. For the next 5-10 years.
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