Chart Of The Day - Global Small Value vs USA

A look at global ex-US small value vs USA large growth stocks...

The worst vs the best: what happens when you take the intersection of the cheapest parts of global equities and map its performance against the most expensive part?

• I originally put this chart together because I had independently found deep relative-value (i.e. one cheap vs the other expensive) in each of: small caps vs large caps, value vs growth, and Global ex-US equities vs USA.

• These valuation gaps arose from more than a decade of underperformance (as the combined chart below shows) hence my quip at the start — this basically being a comparison of the worst vs the best parts of global equities.

• But cycle-noticers will recognize an apparent pattern in the chart: ~decadal cycles of under/out-performance… and it sure looks like the line in this chart is in the process of bottoming; potentially opening up a decade of travel in the other direction (which would be consistent with the relative value case I mentioned). So definitely an interesting chart for the long-term minded and value-oriented global equity investors out there (if there are any left!).

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Callum Thomas
Founder and Editor at The Weekly ChartStorm

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