Now it's time to explore the idea more deeply. Regrettably, I must have deleted the vodka zone since a large part of it is in the post-communist countries. They, of course, had no stock markets before the 1990's.
Thus, I compare the beer zone (Denmark, Belgium, Germany, the Netherlands, and the United Kingdom) with the wine zone (France, Italy, and Spain; Portugal's MSCI history starts only in 1987.) I also added MSCI World, an aggregate stock market index of developed markets as a benchmark.
The result is here:
Note two things:
- The beer zone appears to outperform the benchmark, but the outperformance disappears when you remove Denmark. The beer zone is statistically undistinguishable from MSCI World then. (Sorry, it's hard to beat the market.)
- On the other hand, the three wine countries (France, Italy, Spain) keep lagging behind the World index on a significant basis. If you want to invest in these economies, stocks need not be the best choice. Unfortunate tax policies, labour codes, red tape come to mind. That's way beyond beer and wine.
- Should you invest in the beer zone then? Sorry, it would be deeply unprofessional to give this kind of advice via blog.
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