Thomas J. Gordon

Capitalism, Socialism and 10-Year Returns of Country ETFs

To have the kind of test Gary is advocating you'd have to have 1/2 the countries start socialism and 1/2 the countries start capitalism and then measure the results from there. I'm not sure what the significance of measuring 10 countries, starting 10 years ago, when they've already had policies that effect their returns prior to the 10 years, is. It's an interesting idea though. His proxy for socialism is tax rate, which isn't terrible. I wrote a similiar article a while back.

Calculating Country Risk Observed by Betas

this is an interesting article and the author clearly has training in formal financial theory. I question her "country correlations" though. I find all world markets for the last year or more to be highly correlated (I would guess .9 or greater). If I believed this chart, I would invest in czech republic and I wouldn't get creamed when the u.s. markets go down. But for the last year all I see is everything moving together and no where to hide. I'm not offering any computed data to prove this, but this is what I observe.