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March 17, 2006

Comments

Chris. F. Masse .COM

Are you talking about the French CAC 40?

These French firms do 80% of their business outside France.

chris

No. I mean the Datastream total market index, which has 250 constitutents and a market cap 76% bigger than that of the cap. It has out-performed the CAC over the last 10 years, despite/because of being more domestically oriented.

jck

Are you talking real or nominal returns ? in real terms french market performance is one of the worst in the world => less than half that of the usa over 100 years and even worse for bonds.
for stocks fr:3.1% vs usa:6.3% annual real returns 1900/2002
bonds fr:-0.5 vs usa:1.9 annual real returns 1900/2002
source:dimson/marsh/staunton see chart 4 there:
http://www.abnamro.com.au/content/media/articles/123.pdf

leconomiste

@jck : look at the time span. Europe has suffered from the two world wars far more than the US. Ans most of the WWI destructions happened on French territory...

dsquared

I think your 3) above has it backwards; France is one of the countries where the old mantra of "socialised costs and privatised profits" has been carried out to the fullest. That Datastream index reflect a number of cases where underperforming companies have been nationalised, had their problems sorted out at public expense and then privatised as fully restructured companies.

Also note that the Socialists have actually had very little power over the last thirty years; even the Mitterand era had cohabitation for most of it. The right wing, pro-capitalist party has been in charge in France most of the time.

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