I’ve been lurking on this board for several months now and this is my first post. Before I start with the subject I would first thank everyone here and specially Saul who created this board discussion. I’ve learned so much in these few months and I keep learning everyday thanks to all the people here sharing their knowledge.
I’m still pretty young compared to most of you(24)and I started investing only since march/april of last year. I dont’ have the experience that most of you have so please be gentle if I say something stupid in future analysis :D.
Now my question is: Is there a reason why nobody here is invested in European stocks ? Is it because the US companies are more interesting that the European ones ?(which I could understand because I find them more interesting too even though I’m from Europe) or maybe to much risk with the exchange rate ?
It seems (at least for me) to be harder to find hyper growth stocks on European stocks than on US stocks. I’ve still managed to find 2 interestings stocks, but I was wondering if it was meaningful to share them with you if nobody is interested in them.
I might still share them with you so you could tell me if I’m doing something wrong with my research. That would help me alot to improve.
What do you guys think ?
Thank you all,
Yorick.
Ps: Sorry for my bad english, I’m from Belgium and my native language is French.
Your writing in English is as good as many Americans’. Please keep posting and don’t let concerns about English being a second language stop you. You’re doing great!
In the U.S., I think there is a bias that regulatory filings by U.S. companies are solid due to scrutiny by the Securities and Exchange Commission (SEC) and that other countries’ filings are more troublesome because of different accounting standards or regulation that is less strict. Personally, I don’t think E.U. regulations are less strict, although I do recognize that accounting standards are different than in the U.S. Again, personally, I choose to make most of my non-U.S. investments through mutual funds, relying on the staff at the mutual fund companies to navigate the differences in accounting standards and regulatory disclosures. I could be wrong, but I suspect that I’m not alone in taking that approach, which is why there is less discussion of European companies here.
I know that Saul has commented on a bias against investing in securities from certain countries in the past, but those haven’t been European, that I recall. I also recall (hopefully correctly) that Saul previously held shares of a Canadian company, and that didn’t seem to bother him.
Because of the differences between U.S. and European accounting, many of us may not be perfect in helping you see if your research is on target, or has flaws. Generally, it is my impression that participants on this board are willing to help people who want to learn, and doubly willing to help those who bring interesting stocks to our attention.
Maybe others will want to comment, as I am not a qualified spokesperson for this message board. I, for one, would love to hear your ideas!
Yorrick - your English is fine and I’m sure having more younglings around is also a good thing to for our breadth and diversity in perspectives. Please stick around.
I’d make a number of comments coming from the UK originally and inhabiting this board whilst based in Asia.
Yes it is very US investment centric (it is a US discussion board with many or mostly American contributors after all)
It is a growth equity focused discussion board
Notwithstanding the US centricity, shares of foreign countries maybe listed in the US or joint listed in the US or listed as ADRs in the US. All of these types of equity listings have been covered from time to time and are considered valid for discussion assuming that the context is growth equities although there is a strong reluctance/pushback on considering Chinese stocks. Bringing up European stocks (I will include UK stocks in that) is acceptable
One consideration though that I know I have debated with Denny on other boards before is that ADRs or joint listings of equities in the US where there is a primary listing elsewhere carries an exchange rate component to the stock price’s performance which may in some cases have a disproportionate effect on viewing the longer term price action of share when currency swings happen.
Another consideration is to what degree stocks in Europe (including UK) represent a growth opportunity versus blue chip stalwart vs a yield opportunity. I came to the realisation that the UK was a rich hunting ground for high yield portfolio investing whilst the US was a much more target rich environment for high growth investing. You would need to consider whether you see Europe as mature ex growth market or whether you can genuinely see the next Amazon, Google, SaleForce.com etc coming out of Europe (like say SAP once)
Whilst the securities & exchanges regulatory environment is considered top notch in the US delivering investor comfort and confidence it is also the richest reporting and investing information terrain in the world which allows investors to evaluate stocks according to a Saul like methodology that may not be available elsewhere (e.g. quarterly reporting, investor publications, brokerages etc). Conversely bringing European stocks to this board may be seen as a risk from an asymmetric information disadvantage but then help from someone like yourself who might be able to fill in gaps about European investment targets could be invaluable
Additionally contributing to this board in terms of how you see the European market place for industries and US listed companies as well as corporate performances and experience is also an invaluable source of information that Americans might not be able to access from North America regarding their existing or intended investments. For that reason I try to share an Asian perspective from here in Singapore occasionally when I see value. For Facebook holders on this board, your exposure and take on the emerging European regulations on data privacy for example could be priceless
Just some thoughts. Look forward to your contributions in the future and hearing about your 2 stocks identified.
Ant
ps for what it’s worth Seeking Alpha has some European based writers who I follow who identify global and European investing opportunities as well as US listed opportunities e.g. Sven Carlin (who might have studied and worked in Belgium if I’m not mistaken).
I held NXP Semiconductor (Dutch) for a while, but sold when the merger with Qualcomm was announced a long time ago. It’s still pending, and the share price has stayed pretty stuck since then, with an increase when Qualcomm needed to raise its offer when NXPI shareholders weren’t tendering their shares. The merger might not end up happening after all, and it’s an interesting company with some overlap with Nvidia in its products.
Now my question is: Is there a reason why nobody here is invested in European stocks ? Is it because the US companies are more interesting that the European ones ?(which I could understand because I find them more interesting too even though I’m from Europe)
Hi Yorick, Actually the people on this board are from all over the world. I know of people from England, Singapore, Central America, Hong Kong, and Europe. Shopify (from Canada) is of major interest here, and Talend (a French company) is as well, and some people have investments in MELI, a South American company, and others in Chinese companies (where I won’t invest for safely reasons). However, the truth is that US companies ARE probably more interesting than European companies if you are interested in rapid growth and innovation. My experience is with France, where I am writing from at present, and I know that, before Brexit at least, if a young Frenchman wanted to start an innovative tech company, he’d move to London to do it. The red-tape and regulations and antibusiness atmosphere in France was just too overwhelming. (As an example, my wife and I started a tiny publishing business in the US some 30-40 years ago, and when we told French friends that all we needed to get started was a tax number and a telephone, they were astounded. In France you’d need all kinds of permits and permissions, which could take weeks or longer to obtain.)
At any rate, we do follow mostly fast growing US companies, because that’s where the action is right now.
I have two reasons for investing mainly in American companies. One is that the US stock market is the most transparent one with the SEC doing a better job at keeping it honest than most other countries. The second is exchange risk. I believe small individual investors should invest in their own currency (if they trust it, I don’t trust the bolivar) or in the world’s reserve currency which now is the US dollar.
There is also the question of where a stock is traded. I will invest in an European ADR but not in a stock that I would have to buy on an overseas exchange. My current broker charges exorbitant commissions on foreign based stocks (five letter stocks).
Over the years I have invested in British, Canadian, Chinese, Danish, and Dutch stocks as well as in dollar denominated bonds from several countries.
The only non-US & Canada tech stock I am invested in is Dassault Systemes, a French IT company which was also recommended by one of the Fool services. It has been good to me over the past 5 years and it would be more at home on the US exchanges where the action is, rather than the pedestrian euro exchanges
Thanks everyone. I understand better why people here or not that much into European stocks.
Saul: I kinda agree that it seems to be harder to create your own company in Europe than in America.
In France though, with the new president, alot of small french stocks soared in 2017 and in 2018 (which thankfully I was invested in some of them). Maybe something is changing ?
The US market is still (for me) the most interesting one but I’m only invested at around 20-25% in US stocks because of the exchange risk. I have the feeling that the euro will keep going up against the dollar. If the EUR/USD goes to 1EUR/1.30DOLLAR or 1.33, I’ll probably go 80% on the US market (but with a dollar-cost averaging technique).
Actually, I don’t really care if I lose 10 or 20% on the exchange risk if I can find some amazing companies that could go 70, 80, 100% or even more.
Ant: Thx for the information, I’ll check out Sven Carlin
I was also interested in Dassault Systemes, but I avoid French stocks that have a market cap of 1bn or more because I’m extra taxed when I buy french stocks that are over 1bn.
In Europe I mostly look for french small stocks under 1B market cap and German stocks.
With some extra cash I bought some € last summer at about $1.19 & 1.20. It’s a small stake about 2% for me. I thought Sig. Draghi and crew would end easing policy sooner. Also I had read that European stocks were not as high in valuation as USA stocks and wanted to speculate. I note many German machinery companies that are interesting to me are privately held. (I am an industrial guy).
Eastern Europe
I wanted some geographic diversity and especially in Eastern Europe so I searched for an etf. My idea is that Czech, Hungarian, Turkish, and Polish manufacturing is growing, fabricating for the French and Germans (parts for Airbus for instance). But I cannot find such a concentrated etf. I bought shares of CEC a Lyxor fund but it is mostly banks and financial services in Poland, Czech Republic and maybe an oil and gas company or two.
Data - Talend
With my Euros I also wanted to buy some Talend stock on a European exchange. After research told me Talend works through partnerships, mainly management consulting companies, I bought one: KEYRUS. It’s a founder led consulting company and partners with other data analytics companies.
Thank you for your feedback, and thank you for the information about Keyrus, I’ll check the company.
Speaking of German machinery, do you know Kuka AG ? A German company that does robotics (but hold around 90% by a Chinese company if I’m not mistaken). Maybe you could find some interest in it (I’m not invested in this company)
