No. of Recommendations: 1
re : american stocks exceptionalism
yes, history is on that side. even some well-respected GARP managers mostly agree, but they have other mandates.
it is far from a guarantee going forward, and structure matters.
and i am highly skeptical of american mkt cap weighted index funds, where both flow and sentiment carry the work more than underlying earnings.
so let me offer the following as equally compelling history :
bessenbinder : if america is so great why do <4% of stocks outperform treasuries ?
dfa : more important than nation, are factors of value and size for future outperformance, and are found to work globally. (via out-of-sample tests)
multiple : why does momentum work even when in conflict with fundamentals? (i.e., as an incremental and partially uncorrelated factor)
