It's not easy to wake up today and buy anything. Looking at duration risk, credit risk, currency volume that is unnatural, and U.S. markets that have run for six years on the equity side.

Image courtesy Vasenka: did I mention the Dollar strength and energy impact on earnings have yet to be discussed in this earnings season in a meaningful way by those reporting.

Swiss National Bank infused volatility highlights the move and the Euro which highlights the tenuous nature of the currency union. It obviously highlights perception that the European Central Bank is mostly handcuffed to improve growth.

Implied in that statement is that central banks can solve the global post credit explosion conundrum with monetary policy games. Most of us in this room don't believe they can long term and we are by definition well into long-term on this six-year experiment.

But despite the euro and also because of the euro it's clear that equity investors must focus on Europe.

Wake up today and see Europe trading at 13.4 X forward earnings versus the S&P trading at 15.9 X forward earnings. European equities offer a 3.4% dividend yield versus 2.0% in the US. And in terms of earnings momentum overall, estimates of Europe are for 8.9% EPS into thousand and 15 versus 7.4% in the US. Look back on relative underperformance and you will see that 2014 (-22% for Europe v US in currency terms) has rarely happened, and this must revert.

Not recognizing the huge impact a Euro that is 25% weaker than it was a year ago and oil prices that are more than 50% weaker than a year ago on the European economy is missing one of the biggest wake up calls for an entire equity region that we've seen in a long time.

Sleep well y'all


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