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Oct 20 2021

Emerging Markets EPS: There's Many A Slip...

  • Oct 20, 2021

If there is one thing sure to make equity investors swoon, it is the prospect of buying into a credible, long-lived secular growth story at a relatively modest valuation. Over the past three decades, Emerging Markets (EM) have proffered just such an opportunity. EM’s economic growth rates have far surpassed those of developed nations, and the valuations attached to EM stocks have often been at a discount to other markets.

However, this combination of secular growth and attractive valuations has not always paid off for investors. The MSCI Index has underperformed the U.S., Europe, and even Japan over the last ten years in local currencies. Furthermore, EPS growth for the EM Index has come in far below its economic growth rate, creating an exasperating drag on Index performance as it tries to keep up with other regions.

Oct 06 2021

Research Preview: Emerging Markets’ Leaky Bucket

  • Oct 6, 2021

Investors view Emerging Markets (EM) as the best source of economic growth across global equity markets, and rightly so. Annualized EM GDP growth of 8.6% since 2001 is more than double that of the U.S. and Europe. However, investors have not captured this extraordinary advance because earnings per share for the MSCI EM Index have lagged far behind EM economic growth rates.

Jun 29 2018

Emerging Markets: Down A Lot, But Not Really Cheap

  • Jun 29, 2018

The stock market liquidity squeeze we’ve discussed this year hasn’t played out quite like we expected. Traditionally, Fed tightening and slowing money growth hit Small Caps earlier, and harder, than the blue chip stocks...

Jul 08 2016

MSCI Reclassification: Winners & Losers

  • Jul 8, 2016

Market classification is an index rebalance on the country level and generally refers to shuffling countries among three baskets: Developed Markets (DM), Emerging Markets (EM) and Frontier Markets (FM).

Jul 08 2016

“Index Rebalance Effect” Once Again Proven

  • Jul 8, 2016

Validating results of a prior study, a look at the last four MSCI index rebalances shows that stocks soon to be added outperform from Announce Date to Effective Date, while deleted stocks underperform.

Jan 08 2016

Foreign Stocks: The Value Trap Persists

  • Jan 8, 2016

Foreign stocks’ perpetual underperformance has opened up a valuation gap that should look extremely appealing to anyone with a horizon of more than two years. But proceed with caution.

Apr 08 2014

Why Are EM Small Caps & Frontier Markets Outperforming?

  • Apr 8, 2014

Emerging Market investors are extending their “small” bet down to Small Caps and the Frontier Markets. We discuss potential reasons behind their outperformance.

Apr 08 2014

U.S. Markets See Uniform Strength, While The World Seems Fractured

  • Apr 8, 2014

Based on the historical percentages, the bull market should have a minimum of four to six months of life left. But the market has a way of throwing sand in the gears when you think you’ve begun to understand its internal mechanics.

Mar 07 2014

Market Valuation Check

  • Mar 7, 2014

Stocks have long looked expensive on the basis of dividend yield, but now they look increasingly stretched on Forward EPS.

Mar 07 2014

The Bull Market Turns Five

  • Mar 7, 2014

The post-2009 stock market upswing now qualifies as only the sixth cyclical bull market since 1900 to last five years or more. But only three of the previous five-year-old bulls lived to see a sixth birthday.

Feb 07 2014

Emerging Market Currencies: January’s Panic Overdone

  • Feb 7, 2014

The emerging markets are in a much better financial position to weather any financial turmoil than they have been in the past.

Apr 05 2013

A Techno-Fundamental Take On The World

  • Apr 5, 2013

At 15.8x Normalized EPS, the non-U.S. developed world (measured by the MSCI World Ex USA Index) still hasn’t managed to recover to its old lows of 18x seen in both 1992 and 2002.

Oct 04 2012

Thirty Percentage Points Of Pain…

  • Oct 4, 2012

The S&P 500 is now up 30% from last year’s October 4th low - a rally that surely ranks among the least enjoyable and least exploited gain of that magnitude in history.

Apr 04 2012

Stay Bullish

  • Apr 4, 2012

It’s April once again… Are we due for yet another market top? Some perspectives on the possibility of attaining a new all-time market high in the current cyclical bull, and what may drive the upside.

Oct 05 2011

Worse Than It Looks… And Not Over

  • Oct 5, 2011

Most costly market decoy in the last six weeks has been unusual (relative) strength of the Dow and S&P 500 indexes. Resilience in blue chips is characteristic of the early and middle phases of a bear market, but recent blue chip performance has been so stellar (again, in a relative sense) that most investors curled up comfortably in the “correction” camp…while small caps, cyclicals and virtually all foreign markets were screaming “BEAR!”


Dec 04 2010

The Charts Of The Year

  • Dec 4, 2010

This month’s “Of Special Interest” takes a look back at and updates some our favorite charts from 2010.


Jun 03 2009

Expect Foreign Stocks to Continue to Outperform U.S. Stocks in this Bull Market

  • Jun 3, 2009

Superior performance of foreign stocks of late is likely only the preamble to what the rest of the cyclical bull market will look like.


Jun 04 2005

Examining the Recent S&P/MSCI Global Industry Classification System (GICS) Changes

  • Jun 4, 2005

Standard & Poor’s/MSCI did their annual review of the GICs groups and made some a few cases adopting groups we had already established at The Leuthold Group and had been tracking for several years. This month’s “Of Special Interest” discusses the changes and presents our take on the new groups.