International Investing

We are living in a global economy yet it seems that many investors often forget that.

Many of the top US multinationals do well over half of their business outside of the USA.  It doesn’t matter where the headquarters are, it’s where the sales are.  About 80% of Apple’s Iphone sales are from outside of the US.  This is just one of many examples where international sales make up the lion’s share of an American company’s sales.

As an investor, I really can’t figure out why the US unemployment numbers have such an amazing ability to move the markets.  We report global sales and then go ahead and report domestic numbers like unemployment rates, housing starts in the US, or US consumer confidence.

There are several reasons that this is ridiculous…

This turbulent economy is very stressful and confusing for many people.  The market is going through one of those phases where major stocks go up and down by a few percent each day with no real news coming in.

Many analysts have it wrong because their academic training was wrong in the first place.  It doesn’t seem to matter where I read my financial info these days. It’s all warped.  It’s very important to understand fundamentals but that’s not the whole story.

CNBC and the big media corporations are using old paradigms to evaluate what is going on.  That’s the problem.

So many “experts” will say the market is “irrational” because it doesn’t behave according to their view of what rational is in the first place.