Here's Piketty, explaining for those of his readers who are unfamiliar with the socialist flavour of European capitalism, why you shouldn't listen to people who say "I'm buying Europe because the US is at a 17 P/E but Europe is only at a 15 P/E!":
At this stage, suffice it to say that the lower market values of German firms appear to reflect the character of what is sometimes called “Rhenish capitalism” or “the stakeholder model,” that is, an economic model in which firms are owned not only by shareholders but also by certain other interested parties known as “stakeholders,” starting with representatives of the firms’ workers (who sit on the boards of directors of German firms not merely in a consultative capacity but as active participants in deliberations, even though they may not be shareholders), as well as representatives of regional governments, consumers’ associations, environmental groups, and so on. The point here is not to idealize this model of shared social ownership, which has its limits, but simply to note that it can be at least as efficient economically as Anglo-Saxon market capitalism or “the shareholder model” (in which all power lies in theory with shareholders, although in practice things are always more complex), and especially to observe that the stakeholder model inevitably implies a lower market valuation[....]
Alternatively, you can just go to Yahoo Finacne and try to find me one European company that you would have wanted to own in the past 25 years.
There's pretty much not a single European company whose long-term stock performance wasn't outshone by equivalent American companies. Nokia was good in the late 90s, that's all I have found in my own studies.
European companies are given a lower P/E always, and it's because - generally speaking, in the capitalist sense - they suck compared to American companies. A 15 P/E for European socially-owned corporations means their multiple expansion has already finished, and now longs will just have to hope for economic growth. Because earnings growth without economic growth can't happen when Euro labour productivity has already been maximized through 7 years of austerianism.
But European economic growth won't happen while the Germanic university dropouts continue to boss around the educated economists. Seriously, you expect a failed Communist-bloc physics labtech and a former tax accountant to have the slightest clue how to stimulate the European economy? They're Germans: they don't even want to try to help the rest of Europe.
And any European economic growth that does happen will be essentially confined to Germany, because that's what the Euro monetary structure accomplishes.
And every stupid American right-wing fascist who still believes in austerianism is already long Europe. So they'll be disappointed.
Dumb, dumb, dumb.