Dirt Cheap Global Stock Markets
Stock-Markets / Stock Markets 2014 Jun 30, 2014 - 09:56 PM GMTBy: DailyWealth
Dr. Steve Sjuggerud writes: You probably haven't noticed, but boring government bonds are up double digits this year...
U.S. stocks continue to push to all-time highs as well... even Europe is soaring to multiyear highs.
Today, we've got uptrends around the globe. The big question is... after so many investments have run up so high, where is the value in the world today? Is there any left out there?
In short, YES!
Let me show you exactly where the value is right now...
There are dozens of ways to size up what's cheap...
One classic measure of value is the price-to-earnings (P/E) ratio. But like most value measures, it isn't perfect on its own.
To fix that problem, we built an in-house value indicator for a few dozen global markets. We call it the "True Wealth Systems (TWS) Value Composite Measure."
These TWS Value Composite readings give us a simple way to see where the value really is in the world.
And today, there is a clear winner...
Let me show you what I mean by looking at a few major developed countries' stock markets.
The table below shows each country's historical premium or discount relative to its own history, based on our TWS Value Composite. In addition, it shows each market's premium/discount to U.S. stocks – the benchmark for comparison for developed markets.
What you can see is, outside of Hong Kong, there isn't much value in these major developed stock markets today, relative to their histories. That doesn't mean they can't go higher, of course. It just means they are "fairly valued" based on history.
But when you look at the major emerging markets, the story changes...
The table below shows the full details. The only change in this table versus the table above is the right column... It shows each country's premium/discount to emerging markets in general, as opposed to the United States. Take a look at a few selected emerging markets...
The first thing that jumps out is, aside from Mexico, the major emerging markets are cheap, based on history.
Of course, places like China, Greece, and Russia aren't the most savory places to invest today. But when you look around the world, these emerging markets offer the best value.
I expect these dirt-cheap markets to be the big winners over the next few years. With over $100,000 of data at our disposal, our computers say emerging markets offer the absolute best value around the globe.
If you don't at least have these beaten-down emerging markets on your radar, you're making a mistake. They're the best value in the world today.
Good investing,
Steve
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