Global Stock Market Comparisons

by | Mar 20, 2008 | Archives

Global Stock Market Comparisons help us spot the best international investing values.

Seeing value is vital at this time when equity and commodity prices are so volitile.

Recent messages analyzed global major and emerging stock market values.  One point worth noting was how in the last turbulent months, global emerging stock markets fared better than major markets.

Major global stock markets have now declined four months in a row.  The Morgan Stanley Capital International (MSCI) World Total Return Index (a measure of global major stock market performance) declined 1.7 % in February and 5.8%  over the last fourteen months.

In the same period, the MSCI Emerging Markets World Total Return Index (a measure of global emerging stock market performance) advanced 7.4 % in US dollars and during the last fourteen months gained 31 % in US dollars and 13.8 % in euros.

This is a huge distortion between the major stock markets and emerging.

The following table shows how emerging global stock markets are now priced higher than major global stock markets.

Valuation Ratios  Rates of Return of Global Stock Markets (%)

PBV is Price to Book Value
PCE is Price to Cash Flow
PE is Price to Earnings
DY is Dividend Yield
CERoE is Cash Flow on Investment
RoE is return on investment
Global Emerging Stock Markets

MSCI EM Index       2.6   10.4 15.9  2.1   25.2    16.6

Global Major Stock Markets

MSCI World Index   2.2     9.5  14.0  2.6  23.2    15.8

Because of this, my major mutual fund bet is on the major markets now.  My current largest global stock market mutual fund holding is the Jyske Invest European Equity fund .

This creates a short term distortion.  Major markets especially during this liquidity crunch and currency turmoil should be worth more than riskier emerging markets.

Because of this, my major mutual fund bet is now on the major markets.  My current largest global stock market mutual fund holding is the Jyske Invest European Equity Fund.

The seven best priced mature markets are Belgium, France, Germany, Italy, the Netherlands,  Spain and the United Kingdom.

Jyske Invest’s European Equity Fund has over 25% of its portfolio invested in the UK now, 22% in Germany, 8% in France and 5% in Spain. In other words more than 60% f its investments are in the best priced mature markets…a dream for value oriented contrarian investors!

This fund is down from 135 euro per share to 105 since November but is a prove solid performer up 98.09% in the last five years. This in my mind makes it ripe for recovery.

Details are available from Thomas Ficher at Jyske Bank. His address is

I’ll be talking in detail about this, along with Thomas Fischer of Jyske Bank at our upcoming International Investment & Business Made EZ course in North Carolina May 23 to 25. Details are at

Then shortly after I’ll review these details when I speak at International Living’s “Ultimate Event” in Cancun Mexico.

I rarely speak at other publisher’s seminars but this May is a special month, the 40th anniversary of my first trip abroad to Hong Kong in May 1968.  Since then it seems that I have hardly stopped.  For more than two decades I have been a contributing editor at IL.  So it is fitting that I share this celebration with IL readers as well as my own.

There are two more reasons why IL’s “Ultimate Event” in Cancun Mexico will be special.

First if you subscribe to Il you may have noticed some new exciting events taking place.

One attraction is that Merri’s and my personal friend, Dan Prescher has taken the helm as publisher of IL.

You can read Dan’s note about IL’s Ultimate Events at

There is one more reason to meet up in Mexico.

Emerging stock markets have vastly out performed mature stock markets.  This is because global stock investors are betting emerging markets will grow faster.

They are correct.

I am betting on a correction of major stock markets  against emerging in the short term. Yet I agree.  Emerging stock markets will  outperform major stock markets long term,

So which emerging stock markets might be best?

This is where the facts become very interesting.

Of the emerging regions, Latin America is way ahead.

Everyone has heard about the great opportunity in China, India and Asia…but look at the global stock market facts.
Last month Latin America as a region gained 8.8 %.  Asia was up 7.4 %, and Europe, Middle East and Africa (EMEA) advanced 6.2 %.

Over the last fourteen months. Latin America was the best performer with a whopping gain of 53.5%, way ahead of Asia up 29.8% and Europe, Middle East and Africa up 17.9 %.

So meeting in Mexico will be timely…a celebration of 40 really good years abroad in the region where equity prices are rising fastest of all.

An invitation to join Merri, me and a host of exciting speakers in Mexico is at


An alternative good value to stocks is Ecuador real estate.

Here are two properties we visited on our last Ecuador real estate tour.

On the coast.

San Clemente Ecuador real estate

In the Andes


April 16-17 Ecuador Imbabura Real Estate Tour

May 13-17 Ecuador Import Export tour

May 23-25 International Investing & Business Made EZ North Carolina

June 7-8 Coastal Real Estate tour

June 11-15, Super Thinking + Spanish

June 16-17 Imbabura Real Estate Tour

June 19- 21 Ecuador Shaman Tour