As a Britisher and an investor it is shocking to see the lame performance for the British stock market since 2000.
Roughly speaking the market has not gone up over the best part of a generation. Meanwhile there has been at least 100% This is a damming statement of something. Is the exchange disfunctional, The City of London at fault, the British establishment for mismanaging its economy?
Lets compare the FTSE with the DOW: The Dow has outperformed by 100%. You might think that’s a bad comparison so lets look at the DAX. It’s the same story. What is also the same story for the FTSE is the French CAC40.
So German and US markets are the same and French and UK markets are the same two. This is a systemic divide. You can draw your own conclusions but you do not have to be a political genius to see that perhaps this is a function of paternalistic governance where business and industry takes a backseat to social engineering.
However lets forget the boring political stuff. There is a big market call here. Do the UK and France slip off the economic map or do they rally? The UK has its do or die Brexit and France is trying on a leader from the new generation that seek change. If either one of these events changes the underlying economic structure of their country towards the US/German model their markets are in for a big rally.
Like all big themes there is pots of money to be made for those that stake out the possibility. Japan did it under Abe, so it can happen. Woe betide France and the UK if they cant turn themselves around because the long term decline of the global relevance of these countries and their fall in prosperity is there for all to see in the performance of their stock markets.