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Some quotes from the article:
But the pandemic experience does not mean that European companies are worse than their American rivals, insisted Drew Dickson, chief investment officer of London-based fund, Albert Bridge Capital. Nor does Europe’s lack of big global tech companies signal something rotten in the state of European business. Instead, that is simply “the outcome of history and chance” — the migration decades ago of tech geeks to Silicon Valley. “It wasn’t Chicago, New York, Nashville or Austin,” he said.“
It isn’t an American thing. You have four of the biggest companies in the world within 40 miles of each other. There was a clustering that happened.”
European companies are highly competitive in other sectors, Dickson argued. “If there is a Boeing, there is an Airbus,” he said. “Where there is a GM, there is Volkswagen. A Southwest, a Ryanair. Once you are in other sectors there is no clear winner. This argument that somehow there is something better in the US is wrong, except in tech.”
Daniel Grosvenor, director of equity strategy at Oxford Economics, agreed that there is a danger of being too pessimistic about European companies. “They haven’t done badly in absolute terms. European profit margins are back at an all-time high. It is not that they had a bad pandemic, just that they underperformed their US counterparts.”
Dickson argued that the underperformance has been driven in part by global investors’ obsession with the high-growth tech stocks that dominate US indices. Europe, meanwhile, is weighted towards value stocks, or companies where profits or book values suggest that a higher share price is merited.
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