Do I Need International Investing For Value?
Summary
Sven addresses the common question of whether value investing is feasible solely within the US market, confirming that it is possible, citing Warren Buffett's advice to "never bet against America." However, he also highlights the benefits of comparing global opportunities, noting that the US market now constitutes 65% of global stock market capitalization, while Europe is 11% and Japan, once 40%, is now only 5%.
Sven expresses significant concern about the current market's heavy concentration in AI-related stocks. He points out that companies like Nvidia, Microsoft, Amazon, Alphabet, Broadcom, Tesla, Meta, and Micron, along with Apple (if considered AI-related), dominate the S&P 500's top 10. He warns that if the AI trend reverses or falters, the entire stock market could experience a drastic 50-60% decline, potentially leading to a 60% real decline over the next decade, as current valuations appear to be peaking due to AI. Sven advocates for value investing as a strategy that performs well in all market environments, suggesting it mitigates such risks.
He mentions that his research platform offers US-listed opportunities, including "stellar buy," "great buy," and "eight really good buys." He specifically cites Alibaba, ADM, Fiserv, JD.com, Liberty Global, and Mercado Libre as examples of US-listed stocks available on his platform. He also refers to Lululemon, PayPal, and Adobe as examples of "cheap, traded in the US" stocks discussed recently. Sven encourages investors to build wealth over decades through a process of finding value, even if it means establishing multiple investment pillars, such as opening an international brokerage account like Interactive Brokers, for when domestic opportunities are limited. He advises against diversification for its own sake, instead focusing on identifying true value at the right price.
Mentioned Stocks
Reasoning: Sven includes Broadcom as part of the top 10 S&P 500 companies that are heavily concentrated in AI. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven includes Micron as part of the top 10 S&P 500 companies that are heavily concentrated in AI. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven includes Amazon as part of the top 10 S&P 500 companies that are heavily concentrated in AI. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven includes Meta as part of the top 10 S&P 500 companies that are heavily concentrated in AI. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven warns that Nvidia, while perhaps "fairly priced" if the current AI environment continues, represents a significant market risk. He predicts that if there's a cycle reversion in semiconductors or AI, the entire market, heavily concentrated in AI stocks like Nvidia, could decline by 50-60%, with a potential 60% real decline over the next decade. This is due to everything "peaking in AI."
Reasoning: Sven references PayPal as an example of "things that are cheap, traded in the US" that have been recently discussed. He implies these represent good value opportunities.
Reasoning: Sven includes Microsoft as part of the top 10 S&P 500 companies that are heavily concentrated in AI. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven includes Alphabet as part of the top 10 S&P 500 companies that are heavily concentrated in AI. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven references Adobe as an example of "things that are cheap, traded in the US" that have been recently discussed. He implies these represent good value opportunities.
Reasoning: Sven suggests that if Apple is considered an AI-related company, it contributes to the S&P 500's heavy AI concentration. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven mentions Alibaba as one of the "liquid in the states OTC markets" stocks available on his research platform, which currently features "stellar buy," "great buy," and "eight really good buys." This implies it is a recommended value investment.
Reasoning: Sven includes Tesla as part of the top 10 S&P 500 companies that are heavily concentrated in AI. He warns that if the AI trend reverses or falters, this concentration could lead to a severe market decline of 50-60%, potentially resulting in a 60% real decline over the next decade. He views the current market as "peaking in AI," making these dominant stocks risky.
Reasoning: Sven references Lululemon as an example of "things that are cheap, traded in the US" that have been recently discussed. He implies these represent good value opportunities.
Reasoning: Sven lists ADM as a stock available on his research platform, which currently features "stellar buy," "great buy," and "eight really good buys." This implies it is a recommended value investment.
Reasoning: Sven lists Fiserv as a stock available on his research platform, which currently features "stellar buy," "great buy," and "eight really good buys." This implies it is a recommended value investment.
Reasoning: Sven mentions JD.com as a stock "traded in the states" and available on his research platform, which currently features "stellar buy," "great buy," and "eight really good buys." This implies it is a recommended value investment.
Reasoning: Sven lists Liberty Global as a stock available on his research platform, which currently features "stellar buy," "great buy," and "eight really good buys." This implies it is a recommended value investment.
Reasoning: Sven lists Mercado Libre as a stock available on his research platform, which currently features "stellar buy," "great buy," and "eight really good buys." This implies it is a recommended value investment.