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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
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  • International Spotlight: Japan

    Fundamentals

    Valuation Ratios in International Equity Markets

    Country

    CAPE

    PE

    PC

    PB

    PS

    DY

    Japan

    28.1

    17.7

    9.4

    1.5

    0.8

    1.6%

    World Average

    20.7

    18.8

    10.8

    2.1

    1.2

    2.3%

    On the basis of book value, Japan's market is inexpensive compared to the world average. Its 41% discount grows to a 44% discount when corrected for sector exposure.

    Economic Freedom

    Japan is the twentieth freest country in the world. Improvements in labor and trade freedom have led to its rise over the past few years.

    2015 Index of Economic Freedom

    Transparency

    Japan is the fifteenth least corrupt country in the world. The government has made strong efforts at controlling corruption.

    Discounted Exposure

    Japan Smaller Capitalization Fund, Inc (NYSE:JOF) currently trades at about a 11% discount to its NAV. That discount is greater than its 10 year and five year average discount.

    Conclusion

    Japan's equity market is less expensive than the US and the world average. Buying it at a discount to NAV via a closed-end fund/CEF enlarges that discount.

    Tags: JOF
    May 04 8:39 PM | Link | Comment!
  • International Spotlight: Ireland

    Fundamentals

    Valuation Ratios in International Equity Markets

    Country

    CAPE

    PE

    PC

    PB

    PS

    DY

    World Average

    21

    19

    10.8

    2.1

    1.2

    2.3%

    Ireland

    12

    21

    13.3

    2.9

    1.6

    1.5%

    United States

    29

    21

    12.0

    2.9

    1.7

    1.7%

    Ireland's market is expensive compared to the world average. In some respects, its high price is similar to the US'. Its premium to book is 29%; that premium is reduced slightly to 24% when corrected for sector exposure.

    Economic Freedom

    Ireland is the ninth freest country in the world. Its rating places it three ahead of the US.

    2015 Index of Economic Freedom

    Ireland has been a refuge for companies seeking to escape the US' high corporate tax rate and regulatory burdens. One recent escapee was Covidien, which was bought by Medtronic (NYSE:MDT).

    Transparency

    Ireland is the seventeenth least corrupt country in the world. The government has made decent efforts at controlling corruption.

    Discounted Exposure

    New Ireland Fund, Inc (NYSE:IRE) currently trades at about a 14% discount to its NAV. That discount is greater than its 10 year, 1 year, and year to date average.

    Conclusion

    Ireland's equity market is expensive. This high cost is partially offset by investing via a closed-end fund/CEF trading at a discount to NAV. Also, it is partially justified by its economic freedom, which is greater to that in the US. This greater economic freedom has led to flight from the US to Ireland of some large, valuable companies. While the US government has been trying to prevent corporate refugees from escaping, future flight will continue to be driven by incentives.

    Tags: MDT, IRE
    May 04 8:37 PM | Link | Comment!
  • International Spotlight: Singapore

    Fundamentals

    Valuation Ratios in Equity Markets

    Country

    CAPE

    PE

    PC

    PB

    PS

    DY

    Singapore

    13.8

    15.7

    11.3

    1.4

    0.9

    3.2%

    World Average

    20.7

    18.8

    10.8

    2.1

    1.2

    2.3%

    Singapore's market is substantially cheaper than the world average. However, when corrected for sector exposure, the 44% discount shrinks to a 16% discount.

    Economic Freedom

    Singapore is the second freest country in the world. Its rating has strengthened through the years.

    2015 Index of Economic Freedom

    Modern Singapore's miraculous success is owed in large part to its founder, Lee Kuan Yew.

    We are ideology-free. Does it work? If it works, let's try it. If it's fine, let's continue it. If it doesn't work, toss it out, try another one.

    - Lee Kuan Yew

    Transparency

    Singapore is the seventh least corrupt country in the world. The government has no tolerance for corruption. The government is the best in the world at controlling corruption with consequences that include severe punishment.

    Discounted Exposure

    Aberdeen Singapore Fund, Inc (NYSE:SGF) currently trades at about a 12% discount to its NAV. That discount is greater than its 10 year, 5 year, and year to date average.

    Conclusion

    Singapore's equity market is inexpensive, especially for a country with one of the freest and most transparent economies in the world.

    Tags: SGF
    May 04 8:26 PM | Link | Comment!
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