26 Jun 2019
The US is expensive, and emerging markets (EMs) are cheap
We’ve observed that before. But price alone isn’t what matters. What matters is the relationship between what you’re paying and what you’re getting, and the US and EMs represent different baskets of businesses.
The caricature is that the US is dominated by high-growth, high-return tech firms, while EMs are dominated by lumbering, low-return state enterprises. If one market is full of great companies and the other is full of junk, the former should command a richer price.