International (non-US) Equities Versus US Equities: The "Arguments") - Pages 138-145.

Watchnerd wrote: |Thu Sep 5, 2024 10:37 am Whilst Billy C posted at: |Tue Sep 5 2024 1:15 am.

It’s fascinating how US stock dominance since 2007 correlates almost exactly with an increase in oil production; no doubt not an accident!

I don’t agree. A large proportion of US stock outperformance can be traced to tech stocks; returns of Apple, Microsoft, Facebook, Google Meta Nvidia Tesla etc have no correlation to low oil prices; for causation to occur you need more evidence than correlation alone. FYI I have worked in technology sector for 30+ years so this argument does not convince me.

As I noted previously: viewtopic.php?t=409214&start=6351 Oil is only one factor contributing to US stock outperformance; other contributors must exist too. That being said, having reliable domestic oil and natural gas production remains essential. Consumer and business trust in energy security increases as energy costs decrease, leading to improved economic conditions and conditions of consumers and businesses alike. Furthermore, since America now exports oil and natural gas instead of importating them from overseas sources every year – keeping billions within domestic economies rather than going overseas to finance energy importation costs. Now money is coming back into our country from foreign competitors as they purchase energy produced here. Imagine what happened back then during an oil shortage! Waiting in line for hours just to buy half a tank of gas did not contribute positively to consumer confidence, worker productivity, real earnings growth or stock returns. More recently, look how Russian natural gas pipeline shutdown has had negative repercussions across Europe. There have been reports of German deindustrialization as a result of higher energy prices:https://www.bloomberg.com/news/features… facturers/ It cannot be overemphasized how critical energy security is for any country’s wellbeing and future growth. Economic security, national defense and quality of life for residents all depend upon international cooperation for greater earnings growth and stock returns. “I doubt whether international funds offer substantial additional value over time for investors” — John C. Bogle