Turtle bay, a famous U.S. hedge fund manager, claims that given the U.S. stock markets spectacular performance, there would be little reason to have emerging markets exposure in his portfolio and dismisses the idea of international portfolio diversification. Indeed, many financial economists have proposed that Turtle bays claim can be reconciled with behavioral or rational stories (i.e., risk premia).

Critically evaluate Turtle bays claim with reference to appropriate theories and empirical evidence.