Which country’s stock market is crushing the U.S.’s today… what’s behind the outperformance… Wednesday’s event with Eric Fry… what’s going on with cryptos? … a quick profile of Jonathan Rose’s newest trade
Quick – without thinking – which one of your children is your favorite?
Yes, yes, you love them equally but in different ways…
Unfortunately, investing doesn’t usually work like that. Most of us have a very clear “favorite child,” that we lavish with far too much attention…
I’m not referring to a particular stock, but to the U.S. stock market.
This tendency has a name: “home country bias.”
Put simply, it’s the habit of overweighting investments from your home country far beyond what a balanced, global portfolio would suggest – and Americans are some of the worst offenders.
State Street Investment Management found that, last year, 81.3% of the average U.S. stock portfolio was allocated to domestic stocks. This jumbo allocation comes despite U.S. stocks making up only 48.6% of the global stock market cap (as of early 2025) according to Visual Capitalist.
Bottom line: We own way more of our own market than we should based on a global market-cap weighting – despite U.S. stocks having some of the most expensive valuations in history.
But don’t U.S. stocks always outperform anyway?”
No.
They have in recent years, but they don’t always.
And more recently, as my colleague and global macro investing expert Eric Fry just pointed out, the U.S. hasn’t been the world’s star performer lately:
The S&P reached its highest level on record late last month.
Yet, the best-performing companies from July 19 to August 19 were not in the S&P 500, which only notched a 2% gain in that stretch. Average valuations were already too high for that…
Instead, that prize goes to Japan, with an 11.2% gain.
And this isn’t cherry-picking.
As you can see below, the iShares MSCI Japan ETF (EWJ) is handily beating the S&P 500 here in 2025 – about 19% higher versus the S&P’s 11% return.
Plus, valuations of Japanese stocks provide a lot more runway for additional gains before they begin to approach today’s lofty U.S. valuations.
According to WorldPERatio.com, Japan’s stock market price-to-earnings (PE) ratio is just 16.36 – nearly 40% less than the U.S.’s 26.41 PE.
If Eric is right, this is a great opportunity for massive upside with reduced risk relative to expensive U.S. stocks:
This is just the start of a greater Japanese trend… and it should signal your attention to stocks outside of the United States.
How Eric’s broader methodology led him to Japan
There are a handful of reasons why Japan is on Eric’s radar today – shareholder returns, fresh capital inflows, M&A activity, AI adoption, and inflation tailwinds – but they all support a broader framework that Eric loves when he searches for opportunities…
“From ‘down a lot’ to ‘up a little.’”
This framework takes advantage of asymmetry.
When an asset has already suffered a massive drawdown, much of the bad news is usually priced in. Sometimes, washed-out prices reflect worse news than actually exists.
Overall, expectations for these stocks are low, valuations are compressed, and investor sentiment is in the dumpster. This creates an environment wherein even modest improvements – a turnaround in earnings, new leadership, regulatory reform, or a mild uptick in investor perception – can spark outsized gains.
Plus, additional downside is often limited because the market has already punished the stock – meanwhile, the upside can be enormous as the first signs of recovery attract new buyers.
Bottom line: It’s in that gray zone between “exhausted pessimism” and “cautious optimism” where some of the market’s biggest winners are born.
For decades, Eric used this approach in foreign markets to find some of his biggest winners. Here he is with one such example:
In 1996, I recommended buying Banque Nationale de Paris, a major French bank that, after a series of mergers, is now known as BNP Paribas SA (BNP.PA).
BNP has delivered a whopping 1,355% gain in the three decades since.
Like Japan was when I recommended that $12.9 billion ETF, BNP was down a lot… but up a little.
Of course, you don’t have to look abroad. Eric has found plenty of domestic 10-baggers too. In fact, the total count – domestic and foreign – clocks in at 41.
But whether domestic or abroad, this “from ‘down a lot’ to ‘up a little’” framework has been the primary driver of Eric’s quadruple-digit returns.
After decades of success, Eric has finally quantified exactly what goes into this framework – and on Wednesday, he’s revealing it
Eric has spent the past five years refining his “10X Breakthrough” system, which isolates the exact characteristics shared by his biggest winners before they soared.
Two of those factors are the “down a lot” and “up a little” dynamics we’ve just discussed. And Japan is the latest real-world example of why this framework works.
On Wednesday at 10 a.m. ET, Eric is unveiling this system publicly for the very first time in a special event. He’ll show exactly how he combines the system’s machine-powered analysis with his three decades of experience to pinpoint a select few stocks with 10X potential.
He’s even planning to reveal his first five official recommendations – including their names, ticker symbols, and the exact dates when his system flagged them as “Buys.”
If you’re overweight U.S. stocks… looking for more attractive valuations… or simply interested in 10X investment ideas, this is the event for you.
You don’t have to abandon your “favorite child.” But as an investor, it’s wise to give the others some attention too.
Click here to reserve your seat for Wednesday’s event.
Has Bitcoin lost its mojo?
As you can see below, since topping out on August 13 at an all-time high of roughly $123,000, Bitcoin has been making a series of “lower highs” and “lower lows.”
It’s now trading at the same level as far back as May.
But our crypto expert Luke Lango has a different take…
It’s less about Bitcoin waning, and more about altcoins strengthening – exactly what crypto investors should want to see.
From Luke’s issue of Ultimate Crypto at the end of last month:
One phrase nicely sums up the crypto markets recently: quiet on the surface, loud under the hood.
Recently, the tape flashed a familiar tell wherein Bitcoin dozed but altcoins danced. If you’ve been waiting for Altcoin Season, we think it has finally arrived.
In recent weeks, Bitcoin has been shuffling between the low $110Ks and low $113Ks and finished flat-to-down, basically a yawn at the headline index level.
That’s not bearish—it’s the rotation you want.
When BTC goes sideways and the rest of the board prints green, that’s capital sliding down the risk curve.
But what about this past week? Altcoins ran into some headwinds.
Back to Luke:
Zoom out. The best buying opportunities usually arrive wrapped in short-term fear.
The market frets about regulation or macro data, dumps a few points, and then months later you realize those dips were gifts.
This feels like one of those moments.
Stablecoins are poised to transform global payments, the Fed is about to provide rocket fuel, and the timeline for both may have just accelerated.
Bottom line: short-term noise is creating long-term opportunity.
Luke goes on to write that we’re finally in the early innings of “Altcoin Season” – a period when many altcoins experience significant price increases and outperform Bitcoin.
But this doesn’t mean Bitcoin is done climbing…
Luke says that we have about another year before this cycle peaks. And during that time, he still expects the grandaddy crypto to climb to $150K–$200K.
But he believes smaller, leading altcoins will likely beat out Bitcoin’s percentage gains.
If you’re looking for which corners of the altcoin world to focus on for the biggest returns, Luke favors names levered to stablecoin adoption and tokenization rails.
Here’s his bottom line for today:
We remain bullish on Bitcoin and Ethereum as core holdings.
But if you’ve been waiting for a window to “load up” on select alts, this is the kind of market you plan for.
Jonathan Rose’s latest trade idea
For newer Digest readers, Jonathan is the latest analyst to join our InvestorPlace family.
He earned his stripes at the Chicago Board Options Exchange, going toe-to-toe with some of the world’s most aggressive and successful moneymakers. He’s made more than $10 million over the course of his career, profiting from bull markets, bear markets, and everything in between.
Frankly, Jonathan has been crushing the market here in 2025. A few such examples in Advanced Notice from the last few months include:
- ETHA call spread: +275.33% (less than a month in the trade)
- U Call Spread: +227.03% (about a month and a half in the trade)
- MP Call Spread +700.00% (about half a month in the trade)
And here in the Digest, we’ve put two of Jonathan’s recent trades on your radar: QXO and LYFT. Both are off to good starts…
We profiled QXO in our 8/26 Digest, less than two weeks ago. It’s up about 4% since. And featured LYFT last Wednesday – it’s already up 3%
Today, let’s quickly profile another: Karman (KRMN).
It’s a small-cap defense contractor that builds missile and rocket components.
After introducing Karman, Jonathan zeroes in on what really has him excited:
KRMN’s market cap is still under $5 billion. That means we’re in before the herd. But there’s more.
Since April, we’ve watched a massive divergence grow between the Nasdaq 100 and the Russell 2000.
Big tech has been ripping while small caps have lagged. That kind of divergence is a coiled spring, and when it releases, it’s small caps that get the explosive move.
Layer in the Federal Reserve hinting at lowering rates, and that’s rocket fuel.
We’re running long today, but for a deeper dive into the opportunity, check out Jonathan’s free Masters in Trading Live episode “5 Reasons to Buy KRMN.”
And remember, you can catch Jonathan and get his latest market ideas – totally free – every day the market is open at 11 a.m. ET in his Masters in Trading Live broadcasts. You can sign up right here.
Circling to Karman, I’ll let Jonathan take us out:
When I look at KRMN, I see a powerful policy tailwind. Deep government ties. And market that’s still sleeping on the story.
That’s the exact recipe that’s given us our biggest winners. And I believe KRMN is next in line.
Have a good evening,
Jeff Remsburg
