Investment, Un-American Style

Forbes ^ | 10/02/2014 | Ken Fisher

[SeekAndFind]

To hell with Obama–be un-American. I am! Our country has a great future. But it’s too popular. The U.S. of A. is 23% of global GDP yet sports 28 of the world’s 50 biggest stocks. American markets have outpaced foreign ones for seven years. These things fluctuate.

Yes, America has inherent advantages that few see. When I was a young man in the 1970s, tech firms were scattered across the developed world. Since then America has come to dominate tech, almost totally.

The largest official non-U.S. tech stock is China’s Tencent Holdings , which really isn’t a tech outfit at all but a multi-industry conglomerate. You have to run down through seven U.S. firms to find another foreign tech firm, Taiwan Semiconductor (TSM, recommended July 21). Next is Germany’s SAP at $93 billion in market cap, followed by another free fall all the way to China’s Baidu at $ 63 billion–and then, again, to Ireland’s Accenture at $54 billion, which isn’t entirely a tech firm either. The vacuum continues down from there.

This offers American companies a great long-term adjacency–effect advantage over foreign firms–one techie at a cocktail party casually describes what her firm is cooking, and the listening consumer products guy gloms an idea. Yankee ingenuity continues.

But we’re still too popular. America grouses about itself endlessly. The market simply hasn’t. Over rolling long periods U.S. and non-U.S. stocks tend to equalize. Foreign’s time approaches. Prepare now. Heretical as it sounds, be un-American. Own a good chunk of foreign along with your U.S. holdings. Our world is only 55% U.S. stocks. Even if you’re bullish on America, and I still am, you should be at least 30% foreign.

I’ve had some overseas stocks in almost all my columns in recent years.

[Pearls Before Swine]

“I’m Ken Fisher, and I’d like to manage your money.”

Actually, Ken’s had some good insights over the years in his Forbes columns.

[PieterCasparzen]

Thanks for your input, new world order Ken Fisher.

Let me file that in the circular file.