As we progress into Q1 of Fiscal Year 2022-2023, this playbook outlines our thoughts on every asset class and our plan to profit.
This playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates, as well as outline our views on the major nifty indices and the sector/thematic indices.
We also cover individual stocks we want to be buying to take advantage of the themes discussed in the playbook.
When it comes to the bond market, Larry is the guy I want to talk to. And with Bonds getting off to their worst start to a year, maybe ever, what better time than the present to dive into the fixed income markets?
While I had him, we also discussed the equities markets, commodities, metals and Crypto.
We've been joking internally that the new highs list is a lot longer when you include ADRs.
As US stocks come under increasing pressure and the rotation into value becomes more pronounced, international stocks are garnering some well-deserved attention.
We also have a bi-weekly scan where we focus exclusively on the largest ADRs, which are just foreign companies listed on US exchanges. It's called the International Hall of Famers, and you can check it out here.
The only problem with it is that a lot of the cyclical stocks that are showing leadership have smaller market capitalizations, and our universe is focused only on large caps.
As such, we thought we'd run a scan to identify some of the strongest international stocks between a market cap of $1B and $35B.
For most of my career, I've listened to fundamental analysts make the argument that investors should be overweight international stocks because they're "cheaper" than US stocks.
This has been the case for a long time now, and it's merely a function of the fact that there are far more value and cyclical stocks overseas.
But, since value stocks have been out of favor for so long, ex-US stocks have severely underperformed domestic markets.
Growth has been the place to be for the last decade, and for this reason the alpha has been with the tech-heavy US stock market over its global peers.
But now that we're seeing the tide shift in favor of value, we're also seeing early signs of reversals in the US versus the world relative trends.
There's still more work to be done before we have conviction that we want to favor international stocks, but the weight of the evidence continues to move in that direction.
