As this article from the New York Times and International Herald Tribune points out, the quickest economic recovery has been seen in Brazil, China, and India. I’m not surprised that is the case, since the EAFE index has demonstrated recent strength against the S&P 500. Our Systematic RS International portfolio is running well ahead of EAFE so far this year, probably due to its emphasis on Asia and Latin America. This is not due to any insight on our part, but simply because that’s where relative strength has been highest.
Americans tend to have a Ptolemaic worldview, where we believe everything revolves around us. Yet our economy is increasingly linked to the rest of the world through intricate mercantile relationships. It might take a while, but we’re going to need to get used to looking globally for investment themes.
