Five Reasons Not To Ignore Europe

europeRudy Martin: Have you ever done something completely opposite from your instincts? I did a while ago, with surprising results.

My landscaping firm — with which I was already unhappy — raised its rates and I decided to hire a different one. I was excited to see what the new company could do for me.

But when I returned home the day of the new company’s first treatment, my yard was a catastrophe! The partially trimmed hedges looked like a spiked haircut gone bad. Loose clippings covered the driveway and walkways.

I was not happy, and my intuition was to immediately terminate the new landscaping firm and look for another. But because I was tired of evaluating those outfits, I decided to try a strategy contrary to my basic sensibilities.

I’m still not sure why I decided to let the second crew return. But this time, I made one change to our business relationship that completely changed the outcome of their visit.

That day, I decided to work from home, so that I was there to greet the landscapers before the next yard treatment. When they arrived, I forced a big smile, walked up to the senior person, shook his hand and thanked him for his work on my property. I told him to let me know if they needed water or anything else.

Then I reached for his shirt and stuffed a $5 bill into his breast pocket. I did the same with his assistant. I crossed my fingers in paying their bill and wrote on the invoice, “Your crew is great!”

Every time I’m home when they landscape my property, they get the same treatment — including the $5 bills — except that the complimentary messages I jot on the invoices are now totally sincere and accurate.

Thanks to this very counterintuitive behavior, I think some nearby residents are jealous. Their neighbor Rudy’s property now looks like a magazine cover!

Feel free to use this strategy. Here’s another strategy of mine that I hope can also work for you …

Rudy Turns to Europe

Now I’m edging into another area that many investment managers might consider counterintuitive.

The change is that I am devoting more attention to investment opportunities in Europe. That’s right — the same continent plagued by years of recession and seemingly endless financial crises in its southern tier.

“Conventional wisdom” says Europe has been down so long that we can safely ignore its investment potential. I think that is a huge mistake!

Maybe other analysts have been negative on Europe so long that any positive take on the region seems counterintuitive. I’ve tracked European stocks without prejudice throughout the continent’s difficult spell.

I’m not ignoring Europe right now, and here are five reasons why other investors should be paying attention to Europe right now, too …

5 Reasons Not to Ignore Europe

  • The European Union is more-populous than the United States;
  • Most Northern European economies — especially Germany — are doing well;
  • In Southern Europe, Spain is finally showing some growth, while Italian bond prices are improving;
  • The United Kingdom shows signs of economic recovery on several fronts; and
  • Unlike the U.S., European stock prices are still far below their pre-crisis levels.

My specialty is trend analysis. The most profitable trends are big reversals, and smart investors try to catch them just as they begin their ascent. Europe has been down for so long that many investors simply aren’t paying attention anymore. The profit potential can be downright huge.

In fact, while some major U.S. stock market indices are up well over 100% since their bear market troughs, the $4.2 billion SPDR EURO STOXX 50 ETF (FEZ) is barely 75% above its bear market low.

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