Thoughtful Money with Adam Taggart US Growth Stocks To Lose Their Crown To International Value In Coming Years | John Thorndike, GMO
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Nov 11, 2025 John Thorndike, Co-Head of Asset Allocation at GMO, shares insights on the shifting landscape of investment strategies. He predicts that international value stocks will outshine US growth stocks over the coming years, attributing this to current market dynamics resembling the 2000 tech bubble. Thorndike highlights attractive opportunities in European banks, Japanese industrials, and global pharma, while also cautioning about AI hype and its potential repercussions. He emphasizes the importance of strategic, diversified portfolio positioning amidst an uncertain economic outlook.
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2000-Like Market With Focused Froth
- Today's market resembles the 2000 tech bubble: concentrated froth in a few areas but wide opportunity elsewhere.
- Avoid the bubbly themes and lean into non-U.S. and value opportunities that offer better expected returns.
Valuation Gap Between U.S. And Non-U.S.
- Non-U.S. stocks trade at large valuation discounts versus U.S. peers even with similar expected growth.
- GMO forecasts higher real returns for international value, further boosted for U.S. investors by probable currency tailwinds.
AI Is Real But Overpriced
- AI likely is transformative but investor expectations have outpaced its near-term fundamentals.
- High starting valuations amplify downside when sentiment shifts, increasing expected risk for AI-linked stocks.
