Before we could argue that Gerard Minack was the most underrated strategist on Wall Street, he announced his retirement from his then employer Morgan Stanley.
His final note, which was published on May 17, caused quite a stir at the time as he perfectly articulated how and why amateurs were so terrible at investing. He also proceeded to explain that this underperformance was basically the reason why pros stay employed. (Read more about it in our May 17 post. )
Four months later, Minack resurfaced with his new shop, Minack Advisors.
We asked Minack, an artist with charts, for what he considered to be the most important chart in the world. And we weren't disappointed.
"This chart shows listed sector profits relative to GDP. U.S. back at prior peaks," he explained to Business Insider. "A V-shaped profit recovery, despite a lackluster GDP recovery. Elsewhere, profits only recouped half their Great Recession losses, and have been falling (as a share of GDP) since."
"Bottom line: there’s less upside in U.S. profits, more upside elsewhere," he said. "And combine America’s stretched equity valuations on sky-high earnings, versus below-record earnings and cheaper valuations elsewhere — and I’d rather not be in U.S. equities."
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