I would like some fresh insight from today's posting.
The phenomenon that I am interested in has taken broad hold of
activity in today's equity markets. I have seen it in the
latest August Buy-side Strategist Survey that Zacks does. In
this survey, the dominant global/regional idea is "anything non-US"
is to be avoided. Which means "Buy USA".
And I have seen it in-house picks made by a variety of Zacks
- Housing recovery in the USA, so buy a luxury home builder
like Toll Brothers (TOL) and building materials company Lousiana
- Strong USA auto sales, so Lithia Motors (LAD). Buy
S&P USA market dominated Polaris (PII).
- And on the flipside, a Downgrading of Textainer (TGH) on
weaker global growth playing out in weaker cargo container
What I have seen in the last few months is that it is a "Buy
USA", and "Sell anything else non-USA" theme.
This confuses me.
As a top-down guy, the latest real GDP growth report for the USA
puts this economy at a +2.2% growth rate in 2012. And for
2013, the consensus is for +2.4% growth. Meanwhile, while we
have seen a downgrading in growth expecations for the Rest of the
World, the IMF has global growth rates declining from +3.3% this
year to +3.1% next year. There are still notably higher
growth rates outside the USA.
In addition, I finished reading a research report this morning.
In it, the author stated car sales growth in a variety of
countries outside the USA. For the first six to seven months
of 2012, care sales rose smartly. In Russia (+14% yr-yr),
India (10%), Indonesia (+26%), Brazil (+24%), Mexico (+12%) and
South Africa (+11).
This strikes a simple-minded guy like me as a theme:
Everybody is in the "Seen-One-Seen-Them-All" camp on global
investing. Contagion is no longer an avoid Europe phenomenon.
It is an avoid anything non-USA phenomenon.
However, when you look at the underlying growth rates outside
the USA, they are still above what can be found inside the USA.
My debating questions for all of you...
What catalyst or series of events causes this USA-only trade
wind up and what will cause it to unwind?
Why do you buy USA right now, and why do you avoid the Rest of
Isn't there a fundamental growth opportunity to chase outside of
LITHIA MOTORS (LAD): Free Stock Analysis Report
LOUISIANA PAC (LPX): Free Stock Analysis Report
POLARIS INDUS (PII): Free Stock Analysis Report
TEXTAINER GROUP (TGH): Free Stock Analysis
TOLL BROTHERS (TOL): Free Stock Analysis Report
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