2014 and 2015 are fantastic years for my financial assets portfolio. In terms of unit trusts, I'm up around 10% since the start of 2014. YTD, I'm up 3%. I've recently done a fair bit of rebalancing because several bearish indicators turned up:
1. Europe appears cheap on a CAPE basis. But it does not under my model. Nevertheless I've given it an exception and entered into the trade. I didn't want to miss out like I did for Japanese equities. The EU is the second biggest economic bloc and it may take a year to revive the economy. This means we should see the EU recovering by end 2015 early 2016.
2. I've reduced my US equities drastically, as well as global equities fund. Valuations do not appear cheap, in fact they are in bubble territory. The US economy is recovering nicely but stocks appear extremely expensive.
3. I've moved some funds out of Chinese equities into Emerging Markets. EM appears to be the last bastion that hasn't moved. Here's my take: if the US' wages recover, we should see inflation creeping back. Rate hikes may start in 3Q or 4Q15. More importantly, it may drive up commodity prices, especially with China easing and the US picking up.
4. Russian equities, Mining and Energy sectors, Korea, Tech sector, Africa appear cheap as well. I haven't gone into them nor do I have time to analyse them carefully other than to buy their ETFs / funds. I believe that resource exporting nations will be the last to recover. There after, somewhere in late 2016 / 2017, we should see another global recession. At best, the global stock rally will last until late 2015 / 2016... That's a long time but you need to be nimble or to maintain an asset allocation that is fairly balanced.
5. High yields will come under more pressure from 2016 onwards. It will get increasingly worse until 2018 due to the increasing amount of debt maturing between 2016 to 2018.
1. Europe appears cheap on a CAPE basis. But it does not under my model. Nevertheless I've given it an exception and entered into the trade. I didn't want to miss out like I did for Japanese equities. The EU is the second biggest economic bloc and it may take a year to revive the economy. This means we should see the EU recovering by end 2015 early 2016.
2. I've reduced my US equities drastically, as well as global equities fund. Valuations do not appear cheap, in fact they are in bubble territory. The US economy is recovering nicely but stocks appear extremely expensive.
3. I've moved some funds out of Chinese equities into Emerging Markets. EM appears to be the last bastion that hasn't moved. Here's my take: if the US' wages recover, we should see inflation creeping back. Rate hikes may start in 3Q or 4Q15. More importantly, it may drive up commodity prices, especially with China easing and the US picking up.
4. Russian equities, Mining and Energy sectors, Korea, Tech sector, Africa appear cheap as well. I haven't gone into them nor do I have time to analyse them carefully other than to buy their ETFs / funds. I believe that resource exporting nations will be the last to recover. There after, somewhere in late 2016 / 2017, we should see another global recession. At best, the global stock rally will last until late 2015 / 2016... That's a long time but you need to be nimble or to maintain an asset allocation that is fairly balanced.
5. High yields will come under more pressure from 2016 onwards. It will get increasingly worse until 2018 due to the increasing amount of debt maturing between 2016 to 2018.
Which Regions And Sectors Are International Gurus Buying?
March 06, 2015
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Warren Buffett said in an interview published on 2/25/2015 in the newspaper Handelsblatt that his holding company Berkshire Hathaway is definitely interested in companies in Germany. “Germany is a terrific market, lots of people, lots of buying power, productive, it’s got a legal system we feel very good with, it’s got a regulatory system we feel very good with, it’s got people we feel very good with - and customers,” Buffett said.
George Soros, one of history’s most successful financiers, has been selling US holdings to buy European stocks. It is said that he has moved about $2 billion into companies in Asia and Europe, according to a person familiar with the strategy.
Robert Shiller, who popularized the cyclically adjusted price-to-earnings ratio (commonly known as Shiller P/E), is also thinking about exiting US stocks and getting into Europe. He said in a television appearance on 2/18/2015 “I'm thinking of getting out of the United States somewhat. Europe is so much cheaper.” Specifically, Shiller has already purchased stock indices in Spain and Italy.
Leon Cooperman wrote in an investor letter in January this year remained bullish on the U.S., while predicting bigger gains elsewhere. He said “We expect the European and Japanese equity markets to outperform the U.S. in the coming year.”
The US stock market was up more than 30% in 2013, the best year since the go-go years of the 1990s. 2014 was another strong year for the market. The S&P 500 index was up more than 13%. Since the market recovery in 2009, the stock market has been up for 6 consecutive years. The US stock market appears to be really high. Maybe it is the time to find some real bargains in the international markets. Now let’s look at GuruFocus’ top international gurus to see which regions and sectors these gurus hold the most in recent quarter.
Top Regions
Note: the percentage numbers in these charts may not be added to 100% since we rule out the cash and fixed income assets. Only common and preferred shares are considered in this article.
From the above charts, we are confident to say Europe, Asia, and UK/Ireland are the top regions those international gurus holds their positions. Please be aware that we do not consider USA in this article.
Among the 12 international gurus, 9 funds have their largest holdings in Europe, 2 funds have their top holdings in Asia, and one in UK/Ireland. 3 funds have their second largest holdings in Europe, 4 funds in Asia, and 5 in UK/Ireland. Asia and UK/Ireland divide the third largest holding regions.
Top Sectors
The above charts are the sector allocations of GuruFocus’ top international gurus. The data is from each guru’s recent factsheet.
Those are the top sectors (more than 10% of their holding values) these international gurus hold. Most focus on consumer discretionary, financials, consumer staples, and information technology sectors.
George Soros, one of history’s most successful financiers, has been selling US holdings to buy European stocks. It is said that he has moved about $2 billion into companies in Asia and Europe, according to a person familiar with the strategy.
Leon Cooperman wrote in an investor letter in January this year remained bullish on the U.S., while predicting bigger gains elsewhere. He said “We expect the European and Japanese equity markets to outperform the U.S. in the coming year.”
The US stock market was up more than 30% in 2013, the best year since the go-go years of the 1990s. 2014 was another strong year for the market. The S&P 500 index was up more than 13%. Since the market recovery in 2009, the stock market has been up for 6 consecutive years. The US stock market appears to be really high. Maybe it is the time to find some real bargains in the international markets. Now let’s look at GuruFocus’ top international gurus to see which regions and sectors these gurus hold the most in recent quarter.
Top Regions
Note: the percentage numbers in these charts may not be added to 100% since we rule out the cash and fixed income assets. Only common and preferred shares are considered in this article.
From the above charts, we are confident to say Europe, Asia, and UK/Ireland are the top regions those international gurus holds their positions. Please be aware that we do not consider USA in this article.
Portfolio Name
|
Top Regions
| ||
Europe
|
UK/Ireland
|
Asia
| |
Europe
|
Asia
|
UK/Ireland
| |
Asia
|
Europe
|
UK/Ireland
| |
Europe
|
Asia
|
UK/Ireland
| |
Asia
|
Europe
|
UK/Ireland
| |
Europe
|
Asia
|
UK/Ireland
| |
Europe
|
UK/Ireland
|
Asia
| |
Europe
|
UK/Ireland
|
Asia
| |
Europe
|
Asia
|
UK/Ireland
| |
UK/Ireland
|
Europe
|
Asia
| |
Europe
|
UK/Ireland
|
Asia
| |
Europe
|
UK/Ireland
|
Asia
| |
Top Sectors
The above charts are the sector allocations of GuruFocus’ top international gurus. The data is from each guru’s recent factsheet.
Portfolio Name
|
Top Sector (abouve 10%)
| ||||
Consumer Discretionary
|
Financials
|
Industrials
| |||
Industrials
|
Information Technology
|
Financials
|
Consumer Staples
| ||
Consumer Discretionary
| |||||
Information Technology
|
Consumer Discretionary
|
Financials
| |||
Information Technology
|
Industrials
|
Consumer Discretionary
|
Consumer Staples
|
Financials
| |
Financials
|
Industrials
|
Consumer Discretionary
|
Materials
|
Health Care
| |
Financials
|
Consumer Staples
|
Consumer Discretionary
| |||
Financials
|
Materials
|
Consumer Discretionary
|
Information Technology
|
Health Care
| |
Consumer Staples
|
Consumer Discretionary
|
Financials
| |||
Consumer Staples
|
Information Technology
|
Consumer Discretionary
| |||
Consumer Discretionary
|
Financials
|
Industrials
| |||
Consumer Discretionary
|
Financials
|
Industrials
| |||
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