# A rotation out of U.S. stocks has several possible catalysts

Markdown copy of https://realalpha.app/s/a-rotation-out-of-u-s-stocks-has-several-possible-catalysts/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Lyn Alden](https://realalpha.app/people/lyn-alden/) · Lyn Alden is an independent analyst, full-time investor, and author of Broken Money. · Founded an investment research firm and wrote Broken Money, tracing how technology has shaped money through history.
- Host: [Scott Galloway](https://realalpha.app/people/scott-galloway/)
- Host: [Ed Elson](https://realalpha.app/people/ed-elson/)
- Show: Prof G Markets
- Episode: [Searching For Value Outside the U.S. — ft. Lyn Alden | Prof G Markets](https://realalpha.app/v/RTODqYb7bbg/), Mar 20, 2025
- Moment: 30:46 to 34:11 of the episode (3 min), playing on https://realalpha.app/s/a-rotation-out-of-u-s-stocks-has-several-possible-catalysts/; the episode from there: https://realalpha.app/v/RTODqYb7bbg/?t=1846

## Quote

> “I do continue to hold the view that it's more likely than not that this is **early sign of a rotation**”
> — [Lyn Alden](https://realalpha.app/people/lyn-alden/) at [32:16](https://realalpha.app/v/RTODqYb7bbg/?t=1936) · Prof G Markets

## Takeaways

1. She sees this as a higher-probability window, not a certainty.
2. China and Europe are adding fiscal support as U.S. policy tightens.
3. International markets also benefit from a valuation gap and crowded U.S. positioning.

## About this segment

Lyn Alden says a shift toward international markets is plausible, citing rate cuts, tariff uncertainty, stimulus abroad and relative valuations. She cautions that she has been early in expecting the rotation.

From “Searching For Value Outside the U.S. — ft. Lyn Alden | Prof G Markets”, Mar 20, 2025. [Watch the full episode](https://realalpha.app/v/RTODqYb7bbg/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[30:59](https://realalpha.app/v/RTODqYb7bbg/?t=1859) Do you think this is a temporary blip or is this structural where we might go into a 10 or 15 year period of underperformance of U.S. markets relative to non-U.S. markets? Do you see this as a... significant turning point or something that, you know, kind of wait and see? So I think it's a potential turning point. And I started writing about that last year before all the terror stuff came into effect. My initial catalyst was the U.S. was entering a rate cutting cycle. And so it'd be the first window since 2019 that could be a catalyst for some of those capital outflows. Now, 2019 didn't really end up doing that because, you know, Within a year, COVID hit, and the big U.S. network effect tech stocks really benefited from that.

[31:45](https://realalpha.app/v/RTODqYb7bbg/?t=1905) And also, the U.S. did more fiscal and kind of came out a little bit more explosively than the rest of the world, while China and other places were still kind of in contraction mode. And so that didn't work out last time. And so my kind of framework is, this is the next window for it. Now, a window doesn't mean it's going to happen, but it basically means that it's one of the first higher probability areas in a while. The area of my portfolio that has been more challenging has been expecting a little bit more of a rotation earlier. So I've been early on that trade. So I'm always a little bit cautious to say, okay, this is the big rotation, because I'm mindful of the difficulty of making that call. But I do continue to hold the view that it's more likely than not that this is early sign of a rotation because there now there are a number of things there

[32:37](https://realalpha.app/v/RTODqYb7bbg/?t=1957) there's the there's the initial rate cutting period then there's all the tariff uncertainty then there's the fact that I've been emphasizing China because they've been in a balance sheet recession for a while that you know they're trying to deflate their property market it kind of deflate bubbles there and kind of a gradual pace but last year they started to hit certain pain points on chinese social media um they were you know it was it was starting to come up and then they were starting to hit red lines in the equity market where they're kind of um priority shifted and so my view was that they were going to come out with some sort of hyper stimulus but that they're going to come out with a series of smaller ones whenever they keep bouncing into these red lines and that they're starting to put a floor under things rather than

[33:22](https://realalpha.app/v/RTODqYb7bbg/?t=2002) a ceiling over things and so when we see you know european fiscal open up a little bit not not necessarily for great reasons, but European fiscal opening up a little bit, Chinese consumer stimulus opening up a little bit, while at the same time the U.S. is, you know, still being fairly tight with monetary policy, while also... so around the margins, trying to contract fiscal, and then you add tariffs, it's a pretty good recipe for the rest of the world, especially because there's also that big valuation differential and everybody is on one side of the boat, stuffed overweight into U.S. markets.

[33:55](https://realalpha.app/v/RTODqYb7bbg/?t=2035) So you've talked a lot about something that struck me the last couple of times we've