Is Europe becoming uninvestable?

[Spekulatius]

7 hours ago, LC said:

 

Last I checked it is difficult for non-Indians to directly invest in India. (And please if I am wrong please correct me here). 

 

It's one area I wish I could given the growth profile of the country, but I am not Indian so am limited to companies with ADRs, or broad ETFs. 

 

There is also the FX drag but that is pretty common.

Thats right. You can’t easily open an brokerage account for Indian equities As an individual although I have heard it’s not too difficult if you run an investment fund.

 

The ETF’s I have seen don’t give you access to the Indian mid caps which might be the most interesting segment of the market for stock pickers. the broad Indian indices have mostly underperformed US index funds over longer periods of times.

 

That alone makes Indian equities probably of limits for 80% of the audience here, hence no discussion. Same with South Korean equities which for sure look interesting to me.

[james22]

I see quite a number of India Index ETFs?

 

https://money.usnews.com/funds/etfs/rankings/india-equity

 

https://www.justetf.com/en/how-to/invest-in-india.html

 

https://www.justetf.com/en/how-to/invest-in-india.html

 

https://etfdb.com/etfs/country/india/

 

 

[formthirteen]

How the British Broke Their Own Economy

https://archive.ph/2025.03.03-161011/https://www.theatlantic.com/ideas/archive/2025/03/uk-needs-abundance/681877/#selection-868.0-868.5
 

Quote

Some of Britain’s problems echo across the European continent, including slow growth and high energy prices. More than a decade ago, Germany began to phase out nuclear power while failing to ramp up other energy production. The result has been catastrophic for citizens and for the ruling government. In the first half of 2024, Germans paid the highest electricity prices in the European Union. This month, Social Democrats were punished at the polls with their worst defeat since World War II. Bowman offered a droll summary: “Europe has an energy problem; the Anglosphere has a housing problem; Britain has both.”

 

Quote

Effective 21st-century governance requires something more than the ability to win elections by decrying the establishment and bemoaning sclerotic institutions. Progress requires a positive vision of the future, a deep understanding of the bottlenecks in the way of building that future, and a plan to add or remove policies to overcome those blockages. In a U.S. context, that might mean making it easier to build advanced semiconductors, or removing bureaucratic kludge for scientists while adding staff at the FDA to accelerate drug approval.

 

Quote

In the U.K., the bottlenecks are all too clear: Decades-old rules make it too easy for the state to block housing developments or for frivolous lawsuits to freeze out energy and infrastructure investment. In their conclusion, Bowman and his co-authors strike a similar tone. “Britain can enjoy such a renewal once more,” they write. “To do so, it need simply remove the barriers that stop the private sector from doing what it already wants to do.”

 

£100 million on a bat shield

 

Quote

Last year, Britain’s high-speed-rail initiative was compelled to spend an additional £100 million on a shield to protect bats in the woods of Buckinghamshire.

[Sweet]

It's ironic.  My post history in this thread is that Europe has been nearly uninvestable - I am exaggerating slightly but it has been bad recently.  I have always preferred US stocks and markets for that reason, it's just the best.  And yet, some of the policies and tariff proposals etc is making me think that for the next four years at least, the US market could be hard and it is making Europe look a bit better.  They still need to kill a lot of regulation and policies, but some of the political changes afoot could be good for European stocks and the economy in general.

 

 

Edited Tuesday at 12:33 PM by Sweet

[thowed]

Wait long enough (Have we hit the Top / Bottom?) and these topics always look ridiculous.

[formthirteen]

29 minutes ago, Sweet said:

They still need to kill a lot of regulation and policies, but some of the political changes a foot could be good for European markets in general.

 

Yes, the future is looking good for the EU after the European commission started the war on red tape with the goal of cutting red-tape by 25-35%:

https://commission.europa.eu/law/law-making-process/better-regulation/simplification-and-implementation_en

 

They could start by removing banning the cookie popups and save the world millions of hours lost to waiting for and clicking popups. Deregulation is not rocket science.

 

https://www.euronews.com/my-europe/2025/02/25/deregulation-row-could-overshadow-eus-flagship-clean-tech-plan

 

Quote

85% of companies currently subject to the regulation would be exempted, chiefly because the threshold would be raised from 250 to 1,000 employees.

 

Quote

“The draft omnibus goes far beyond what anyone could reasonably call ‘simplification’ - it is outright deregulation,” ETUC deputy general secretary Isabelle Schömann said. “There is no attempt to strike a balance between the needs of users of sustainability information and companies.”

 

Quote

In the European Parliament, where the conservative European People’s Party – the largest group – can rely on support from further to the right as it pursues its stated aim of dismantling what it sees as the excesses of the Green Deal. 

 

Edited Tuesday at 12:36 PM by formthirteen

[Sweet]

3 minutes ago, formthirteen said:

 

Yes, the future is looking good for the EU after the European commission started the war on red tape with the goal of cutting red-tape by 25-35%:

https://commission.europa.eu/law/law-making-process/better-regulation/simplification-and-implementation_en

 

They could start by removing banning the cookie popups and save the world millions of hours lost to waiting for and clicking popups. Deregulation is not rocket science.

 

https://www.euronews.com/my-europe/2025/02/25/deregulation-row-could-overshadow-eus-flagship-clean-tech-plan

 

 

 

 

 

I was not aware of this, thanks for posting.  I need to read more about it.

[formthirteen]

Even energy issues are being addressed:

https://www.world-nuclear-news.org/articles/cabinet-moves-to-reverse-italys-anti-nuclear-stance

 

Quote

Speaking the following day at the Global Energy Transition Congress in Milan, Pichetto Fratin, said: "We expect to be able to reach about 8 GW from nuclear power by 2050, covering more than 10% of the nation's electricity demand. This percentage may increase to over 20-22% by fully exploiting the potential of nuclear power in our country."

 

https://www.innovationnewsnetwork.com/the-interplay-between-complicated-and-complex-tasks-the-revival-of-swedish-nuclear-power/54727/

 

Quote

The plan targets the installation of a minimum of 2,500 MW of nuclear power capacity by 2035, with an ambition to increase this to 10,000-12,000 MW by 2045, equivalent to the addition of approximately ten large-scale reactors.³

 

Quote

Decades of nuclear phase-out policies in Sweden have resulted in regulatory frameworks that are ill equipped to handle the complexities of new nuclear technologies or new-build projects, but particularly SMRs. Governmental agencies are tasked with adapting corresponding frameworks, but their efforts are hindered by a lack of expertise due to the absence of new nuclear construction since the 1980s.

 

[formthirteen]

Foundations: Why Britain has stagnated

https://archive.ph/JhtDP

 

Quote

 What can explain France’s prosperity in spite of its high taxes and high business regulations? France can afford such a large, interventionist state because it does a good job building the things that Britain blocks: housing, infrastructure and energy supply.

Quote

 Britain’s best chance of achieving rapid economic growth in the near term is via a combination of higher private investment, more agglomeration – that is, greater clustering of economic activity in productive places – and lower energy costs.

Quote

the sources of its current sclerosis are easy to identify and straightforward, in principle, to fix. The problem is not too little investment by the state. It is that the state has prohibited most of the investments we need to make. The solution is to remove these obstacles to investment, mobility and trade, in a politically viable and durable way.

 

 

[Spekulatius]

DAX up ~3.5% today and the rest of Europe doesn’t look to bad either. Also @Dalal.Holdings went hiding . I don’t know if Europe is investable but the stocks make money while the US markets are a shitshow. Go figure.

[Spooky]

48 minutes ago, Spekulatius said:

DAX up ~3.5% today and the rest of Europe doesn’t look to bad either. Also @Dalal.Holdings went hiding . I don’t know if Europe is investable but the stocks make money while the US markets are a shitshow. Go figure.

 

Think he got one of the 30 day bans.

[kab60]

With US stocks making up 75% of MSCI ACWI-index, it seems like every investor and allocator has rushed into US equities during the last decade (no shit). With Trump running the WH, I'm not sure that's prudent anymore. Everybody knew prices were extended, now folks might have an excuse to leave the party. Who's the incremental buyer of US shares here?

 

(I'm not making a bet that the above will happen - but I think the odds look favorable and find a lot more interesting stocks in UK, Canada and the rest of Europe currently than the US anyway. I used to be almost entirely in US stocks, as a European, but am basically out now).

[Spekulatius]

Seriously, the 25% US tariffs are a more significant regulation than anything the EU came ever up with.

 

Then we have DOGE austerity and dismantling of state agencies which remains to be seen what impact it will have. Doesn’t exactly sound like the US stock market deserves a huge safe heaven premium to me.

 

It all boils down to earnings growth in the end.

[formthirteen]

[Sweet]

1 hour ago, kab60 said:

With US stocks making up 75% of MSCI ACWI-index, it seems like every investor and allocator has rushed into US equities during the last decade (no shit). With Trump running the WH, I'm not sure that's prudent anymore. Everybody knew prices were extended, now folks might have an excuse to leave the party. Who's the incremental buyer of US shares here?

 

(I'm not making a bet that the above will happen - but I think the odds look favorable and find a lot more interesting stocks in UK, Canada and the rest of Europe currently than the US anyway. I used to be almost entirely in US stocks, as a European, but am basically out now).

Whilst I agree with the sentiment, I have to ask, if you are basically out of US stocks, what stocks are you in?

 

Where are the equivalent of the Mag7 but in Europe?  There are cheaper stocks in Europe but are they better long term bets?

 

Trump has four years more, after that it’s almost certain he won’t be president again, and I have my doubts about some of his agenda living on when he steps down.

 

Europe seems serious about change, but there is plenty of time to get long and plenty of time for Europe to mess it up too.

 

If you are an American investor right now, your greatest asset might be patience.

[kab60]

14 minutes ago, Sweet said:

Whilst I agree with the sentiment, I have to ask, if you are basically out of US stocks, what stocks are you in?

 

Where are the equivalent of the Mag7 but in Europe?  There are cheaper stocks in Europe but are they better long term bets?

 

Trump has four years more, after that it’s almost certain he won’t be president again, and I have my doubts about some of his agenda living on when he steps down.

 

Europe seems serious about change, but there is plenty of time to get long and plenty of time for Europe to mess it up too.

 

If you are an American investor right now, your greatest asset might be patience.

There is no equivalent of Mag7 in Europe, but are they good long term bets? I don't find them attractive around these levels, and while I focus on long term fundamentals and valuation when I invest, I also tend to turn over stocks pretty quickly. There's lots of durable businesses with decent economics and some growth at 5-10x FCF returning most of their cash either through buybacks or divys. 

 

I think investors (and European politicians) could sorta write off Trump the first time he got elected, as people thought it was a bit of a joke and a fluke. Now he has been elected twice. If that's the kind of guy US voters gravitate towards (you do you!), who knows who'll be next, or whether the next guy will be better or worse for Americas historical partners. I know I don't know, and it seems pretty clear politicians are trying to reduce reliance on the US. Would it be better for Europe with a more neutral posture towards both the US and China? Again, no clue, but I don't think China has threatened any European countries recently, and foreign politics has always been dirty anyways, so perhaps it could be.

[rogermunibond]

German is shifting bigly to spending.

 

$528B to infrastructure spending

$232B to defense

 

Lifting debt brake and running larger >2% fiscal deficits

 

 

[Spekulatius]

The Mag7 is a bit tied to US being a dominant force in politics. Same with US banks and the USD.

 

In any case, trading economic influence with Russia for influence in Europe looks like a bad trade to me.

[Spekulatius]

7 minutes ago, rogermunibond said:

German is shifting bigly to spending.

 

$528B to infrastructure spending

$232B to defense

 

Lifting debt brake and running larger >2% fiscal deficits

 

 

Well @Luke said this can’t be done and he lives there.

[Sweet]

9 minutes ago, Spekulatius said:

 

The Mag7 is a bit tied to US being a dominant force in politics. Same with US banks and the USD.

 

In any case, trading economic influence with Russia for influence in Europe looks like a bad trade to me.

 

Agree with the banks, and that does help explain some of the terrible

price action in US banks lately.  Not sure about the Mag7 - perhaps countries won’t want their data housed in the US if it’s not a trusted partner?  Maybe

 

Regarded trading influence in Europe for Russia.  Yes, terrible idea.  Though I don’t think that’s the plan, it’s just seems to be the unintended outcome from other policies - we will see.

[rogermunibond]

Chancellor Merz seems to disagree with @luke

 

He plans to push it through ASAP

 

https://on.ft.com/43mdLAi

[John Hjorth]

30 minutes ago, rogermunibond said:

German is shifting bigly to spending.

 

$528B to infrastructure spending

$232B to defense

 

Lifting debt brake and running larger >2% fiscal deficits

 

21 minutes ago, Spekulatius said:

Well @Luke said this can’t be done and he lives there.

 

I saw the above mentioned by Roger [ @rogermunibond ] above, posted on an account on X this last night / this morning, while spending time on the POTUS speech at US Capitol, posted by a former Danish minister, Søren Pind, but I haven't been able to find a primary German source.

 

What is your source, Roger [ @rogermunibond ] ? - primary, secondary, whatever, doesen't matter.

 

- - - o 0 o - - -

 

Edit :

 

You beat me to it, Roger, within less than a minute, while I was about to post.

 

Furthermore, I found this :

 

Retuters - World - Europe [ March 4 2025] : German parties agree historic debt overhaul to revamp military and economy.

 

This is important news.

Edited yesterday at 03:57 PM by John Hjorth

[formthirteen]

https://www.morningstar.com/markets/german-fiscal-bazooka-sends-euro-bund-yields-surging

 

 

[Luke]

15 hours ago, Spekulatius said:

Well @Luke said this can’t be done and he lives there.

They are trying to do it before the old Parlament is in place with votes of the old Parlament.

[thowed]

17 hours ago, kab60 said:

I think investors (and European politicians) could sorta write off Trump the first time he got elected, as people thought it was a bit of a joke and a fluke. Now he has been elected twice. If that's the kind of guy US voters gravitate towards (you do you!), who knows who'll be next, or whether the next guy will be better or worse for Americas historical partners.

 

Pretty good summary of how the the World ex-America are thinking, I'd say