I’m old enough to remember that in the later 2000’s no one wanted the S&P here in Canada because it was performing so poorly in comparison to the TSX. I had clients in 2009-13 who absolutely refused to invest in the US on the basis that they were doomed. The markets are funny that way. If you had said in 2009 we’d see a decade of unequaled growth in the US, inflation would not be an issue and we’d see this enormous run you’d have been labelled a crackpot and no one would have taken you seriously. Of course, that’s exactly what happened.
My point is, just because “we” can’t see how Europe outdoes the US at this point, or can’t come up with a plausible scenario for how Canada would catch up to the US, doesn’t mean we won’t see it. It’s very easy to take what we know or think we know, apply it to the markets and say “with all these issues there’s no way that this can be the case”. In reality though, things can be very different.
tldr; or not very interested in Slavas opinion: reversion to the mean.
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