No. of Recommendations: 8
I believe that US stocks has outperformed non-US stocks over the past couple of decades. US companies have led in many areas of technology, such as software, engineering, biotech, etc. In my opinion this is largely due to the very strong university system in the US (especially research universities), that attracts talent from all over the world. Many tech giants started in the outskirts of Boston, Palo Alto, LA, SF, Seatle, etc., with talent grown in nearby research univerisities. Many of our tech innovators have come through MIT, Stanford, UC Berkeley and others. Even Musk came here to attend Stanford in Materials Science, though he deferred admission to start companies, where he hired US graduates in STEM.
It is clear that the US academic system is under attack, not just in liberal arts and gender studies, but in all STEM fields as well. Research universities in the US have depended on competitive grants from NIH, NSF, NASA, EPA, USDA to run their PhD programs in STEM fields. All of these agencies are being drastically cut. The top research universities are cutting way back on graduate students in STEM next year, and some top universities are right now rescinding admissions offers they have already made, due to funding cuts in STEM fields.
I am wondering if the US just killed the goose that lays the golden eggs. Turning the US education system into a punching bag might be a really bad decision for the economy going forward, perhaps for decades.
The US may no longer attract the best from all over the world.
I may re-balance my investments to much more international index, and much less US index. It's been a great run for the US, but I think it might be time to re-balance. Feel free to talk me out of it.
Stopped Clock
No. of Recommendations: 2
I think you are making a category error to think this is unexpected or undesirable in their worldview. Their primary goal is not US economic growth or prosperity. Making sure your fundamental assumptions are correct is imperative to getting a correct conclusion in an analysis. I do agree investing internationally is a good idea.
No. of Recommendations: 2
I'd be careful about any drastic reallocation based on policies of a new president who won by a small margin. There will be backlashes and anti-backlashes and lots of chaos, but national cultures don't just permanently change overnight. I might even agree the U.S. has seen its peak in global influence, but even so it will be a very slow decline, during which US businesses will keep plugging along.
Now if you want to favor international over US based on *valuations*, I'm on board with that.
I also agree with BenSolar that small caps and value will make a comeback. In addition to DFSV in the US, there's a similar international fund, AVDV, from Avantis (a younger sibling of Dimensional Funds). Not much history, so you'd probably want to check out their "factor" based strategy (
https://www.avantisinvestors.com/avantis-individua...), and the CIO, Eduardo Repetto. Here's a video interview with him:
https://www.youtube.com/watch?v=k2DHFPIeY5c&t=3500...
No. of Recommendations: 24
I have to agree that there is potential for a very damaging shift. I read a review of the best educational systems on earth. New Zealand lead in primary school reading, the Netherlands in secondary school language skills, Singapore lead in math skills. The place the USA excelled was graduate school. Students from all over the world come for our graduate programs, and many stay, giving us a major "reverse brain drain" boost.
Graduate schools are getting the double whammy of more difficult visas and cuts in funding. A couple of anecdotal examples: I have a friend who is a very bright geophysicist from Poland. He was in an elite PhD program at Colorado School of Mines, and most of those graduates went off to help produce oil and gas in the US, something we have been very successful at lately. Every single student in his graduate class was from outside the US.
I have two close relatives who received PhD's in Marine Biology through programs affiliated with Marine Biological Laboratory at Woods Hole, Mass. The MBL is a private nonprofit institute founded in 1888. They have had 63 Nobel Prize winners, and research on giant squid axon lead to the understanding of how nerves transmit information. A friend involved with the finances of the MBL has indicated that between the cuts in NSF and NIH grants, the reduction in partner university funds, and the reduction of foreign visiting researchers, it is likely that this 137 year old research center will be closing.
The effect of this massive hole being shot in our own foot will definitely damage American competitiveness, innovation and high tech skill levels.
No. of Recommendations: 1
but... but... they'd be HAPPY to pay a $50K entry fee in Trumpyland, right?? amirite?? Pay the grift and you get access to the... what, access to the what... hmmm.
FC
