Is Europe a buy?

George Kessarios

George Kessarios
Chief Economist & Fund Manager

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Analyst Insights, Friday, 24th of July, 2020

A very interesting chart from Bloomberg shows that Facebook has a higher market cap than the entire Italian market.

Is this realistic? The answer is yes. On the one hand, the market has decided it is, and on the other, Facebook’s appeal is not restricted to the US or any one country, but to the entire world. As such its market cap represents a company with truly global reach. 

However, with valuations in the US more than stretched, the question is, is Europe a buy despite the fact that it has underperformed the US for many years. 


Here are several things to consider when answering this question:

  • The EURO is rising vs the dollar and should act as a tailwind for European equities
  • As a general rule of thumb, buying cheap valuations has a lot of downside protection 
  • Europe as a whole has many advantages vs many economies that could change the sentiment 
  • Things always change, even if it takes time for us to notice them

The bottom line is don’t count Europe out, especially with the valuation differential vs the US. Things never stay the same and eventually, what goes around comes around. 

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

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