Since the new year has come, let's talk about the financial market.

Since the new year has come, let's talk about the financial market.

Currently, U.S. stocks account for 70% of the MSCI All Country World Equity Index. The rest of the world is 30%.

Since the 1970s, the U.S. has repeatedly expanded and reduced its share of the global stock market by half (50%). If the U.S. outperform for a long time, it expands, and if the U.S. is sluggish, it shrinks. Unbelievable, but in the 1980s, the U.S. share of the global stock market decreased by 30%.

The reason for describing the MSCI All Country is to clearly communicate the claim as a reference point.

In the next 10 years, I think there is an overwhelming possibility that 30% of the performance excluding the United States will be good on average. And in the next 5 years, 30% of the performance excluding the United States will be very good. I think this year's possibility is also quite high.

In 10 years, the U.S. is going to have a pretty significantly lower share of MSCI All Country than it is now, and originally 50% is the average over the last 50 years.

Bond rates are based on the 10-year U.S. bond rate, and I think the average rate over the next 10 years is very likely to be higher than the average rate over the past 10 years. And I think the average rate over the next five years is quite likely to be higher than the average rate over the past five years. And I honestly don't know this year, but I'm thinking that if the stock market gets a big adjustment, the 10-year rate might break the mid-3% range at least once. But I don't know how long I can stay below 3%.

You feel it in the nuance, right? I have a very strong outlook on long-term underperformance in U.S. stocks, and I have a slightly weaker opinion on bonds.

Three years ago, the confidence in stocks and bonds was the opposite. Three years ago, interest rates were at their lowest levels in a century. Bonds were at their lowest level ever. They were in an environment where interest rates could go up a lot in a small impact. But interest rates have already been pretty adjusted, so bonds aren't expensive. But right now, large stocks are at their most expensive levels in a century.

Everyone's overwhelming expectations never come true, because if everyone's already positioned themselves as an observatory, there's no additional investors and funds to flow in.

The market outlook for investment banks, published at the end of last year, seems to be all-time high. All together, we forecast a 10% increase in US exceptionalism, China's No Answer, and S&P 500.

Why is the outlook so consistent? An analyst with a minority opinion has been wiped out. Even with the Fed's record interest rate hike, there's no recession, and risk assets are still hitting record highs, so conservative analysts have to bend the view. Or they've lost their jobs.

This year's S&P 500 outlook is overwhelmingly focused on the 6,600 level. I've never seen a situation like this before when consolidating the consensus of investment banks every year.

The January Coffee Pot Longform Article also compiled how the all-time high consensus could be misaligned. Just a look at the Consens summary will help. A link to the text was in the comments.