American Exceptionalism - What's next?

[Crip1]

This may be more applicable to US-based members. Also, this runs contrary to my normal modus operandi as a bottoms-up investor.

By most measurements the US economy has performed as well as any of the major economies during the post-Covid period and the US Dollar is as strong as it’s been in the past 20 years (save for a brief period in 2022). Furthermore, pretty much every morning as I listen to Bloomberg to start the day the term “American exceptionalism” is tossed out, often multiple times. This has caught the attention of my contrarian spider-sense. This suggests that have got to be closer to “maximum optimism” now than in recent times, and max optimism often portends reversal. 

If that is the case, then it seems to me that buying non-US domiciled equities, especially in markets who would be “catching up” to the US economically, would give a double-dose of returns from growing earnings and currency appreciation relative to the USD. 

So, looking for other’s thoughts, pro or con. 

-Crip
 

[Blake Hampton]

My best guess is China due to their strong manufacturing base, but I also don't think they understand property rights over there.

The U.S. honestly seems like the best place to be still. I would argue that our situation isn't great but I still think it's better than the current positions of the EU, Africa, South America, etc. Even reconsidering China, they're currently going through a debilitating property crisis and they carry a ton of debt, some of which isn't even on the books.

 

I think the whole world is in for a tougher time in which the U.S. will continue to lead.

[james22]

I'd make a US Small Value investment before anything International/Emerging Markets if making a mean reversion trade.

 

Just as relatively undervalued and with the Trump catalyst in play.

[Lazarus]

I'm investing in a Swiss ETF as my international play. They have high levels of innovation and are as stable as can be, yet they have lagged for an extended period of time. But I think that AI and Trump de-regulation means the American exceptionalism will continue a bit longer at least.

[cubsfan]

1 hour ago, james22 said:

I'd make a US Small Value investment before anything International/Emerging Markets if making a mean reversion trade.

 

Just as relatively undervalued and with the Trump catalyst in play.

 

Brilliant. Been concerned about the US market - but your right about the small caps. 

[SharperDingaan]

Forever the heretic  .....

 

The US innovates, it does it very well, but it has slept on its laurels for a very long time. The big difference is that now the dragon has woken up, it's breaking the furniture, and years of dammed up innovation are now flowing downstream. It's just super disruptive as old world orders are swept away, new ones established, and there is widespread change. Not a bad thing, and if you are a youth ... this is your future; grab it with both hands, and SQUEEZE!

 

Canada should be a big beneficiary; but only if we continue to play rough hockey, we give as much as we get, and we move with the times. It's not the 1980's anymore it's 2025, and that hot guy/gal back then is now claiming pension, as the times have moved on! Expect lots of volatility, lots of broken teeth/arms, and CAD to fall like a brick .... but a decade from now? CAD approaching parity. Expect restructured inter-provincial trade barriers, and material trade/energy corridors flowing east/west/north not that dissimilar to the EU. New grid and pipe running south, joint NATO development of coastal/arctic waters, tighter and more integrated borders. M&A and infrastructure opportunities, not that different to when highways were being built back in the day; it's not just the US waking up.

 

Back in the day, draft-dodgers were able to flee to Canada; today, that now tighter border is going to be well spent money turning a lot of 'illegals' back. Mystery as to what happens with those who if turned back to the US, would be deported back to 'where they came from', and probable death (ie: Indian Sikh, or Chinese opposition). Not sure that Canada is in the murdering business.

 

Lots of opportunities .... too little time!

 

SD

  

[Crip1]

2 hours ago, cubsfan said:

 

Brilliant. Been concerned about the US market - but your right about the small caps. 

Quick tangent, I'm a White Sox fan. Also a fan of the Bears, Bulls and Blackhawks. Thankfully my investing results have been better.

 

-Crip