donzelion

Buy British or Buy American?

The way I see it, when the pound collapsed last fall versus the dollar, fairly decent British companies went on sale for an additional 25% off. Since I lack any confidence in the USD long-term, getting a portion of my portfolio out of the country makes very good sense to me.

British equities are almost always more deeply integrated in their global operations than American companies (American companies try to avoid global taxation rules by incorporating in Britain - and then incorporating subsidiaries from the British subsidiary). While in theory, these separations are merely paper barriers, anyone who has been awake for the last 16 months might have learned that paper occasionally matters.

If you're looking for globalization to save the day, look to tightly integrated outfits like HSBC (JP Morgan is a fine bank, but where HSBC has integrated management staffs posted in nearly every member of the G20, JP Morgan normally has a couple of country representatives and no deep presence). Same principle applies with double strength for AT&T v. Vodafone.

In terms of BP v. XOM, I'd go with the dividend payer (esp. if the dollar is likely to decline relative to sterling).

As for other matchups, it's hard to pick a clear winner. There really is no British analogue to Wal-Mart - but Carrefour is an excellent European contender (which, it turns out, is also far more global than Wal-Mart, which is barely moving across N. America, let alone high-growth emerging markets).