For the past 3 ½ years, the United States has stood tall in world markets, outpacing its developed-market peers and many former emerging-market superstars.

But now, as the Standard & Poor’s 500 index SPX, -1.11% has closed at a record 2,100 and many latecomers are jumping on Uncle Sam’s bandwagon, one prominent early bull on America is looking for the exits — and he’s eyeing Europe, of all places, as the Next Big Thing.

Also see:Robert Shiller says Italy and Spain are worth a look as U.S. equities get costly

Jack Ablin, chief investment officer at Chicago-based BMO Private Bank, has recommended that clients overweight large-cap U.S. stocks since 2010. BMO is currently 50% overweight the U.S., he told me in a telephone interview last week, but is now preparing to sell a good chunk of that position. “We’re going to go from substantially overweighting the U.S. to neutral to underweight,” he said.

“ ‘I believe over the next three to five years the U.S. is going to take a back seat to international markets.’ ” — Jack Ablin, BMO Private Bank

“This, he emphasized, “is a major policy decision. I believe over the next three to five years the U.S. is going to take a back seat to international markets.”

BMO is a leading private bank that manages more than $60 billion, and Ablin has a big following among investors and is widely quoted in the financial media. He shared these views exclusively with MarketWatch.

Most importantly, he was contrarian — and right — on U.S. stocks, along with a handful of others, like Richard Bernstein of Richard Bernstein Advisors, when the doom and gloomers were chasing an anything-but-America investment strategy.

Ablin’s argument is simple. U.S. markets, he said, are too popular now and are no longer cheap.

“The U.S. has gotten expensive,” he said. “It’s going to disappoint.”

We’ve seen some early signs of that in recent earnings reports.

“Companies are beating their estimates,” he told me, but analysts have reduced 2015 estimates sharply — from 8.1% projected earnings growth late last year to only 2.6% now, according to Thomson Reuters.

And revenue growth for big U.S. companies is especially disappointing. “They’re beating on the bottom line but not on the top line,” Ablin said.

Chalk that up to the strong dollar, a still-frugal U.S. consumer and GDP growth that’s below 3%.

And this sluggish revenue and earnings growth comes at a steep price. The S&P 500 trades at around 20 times the previous 12 months’ earnings, and Morningstar says U.S. stocks change hands at 1.05 times its estimate of fair value. So large U.S. stocks are fully priced but not wildly overvalued by both measures.

Ablin, however, focuses more on the U.S.’s 1.8 times price-to-sales ratio, which he said was expensive. That valuation, he told me, implies U.S. stocks may have a minus-1.7% annual return over the next three years.

Contrast that with developed international equities, which sell at 1 times sales.

That’s much, much deeper than their typical 20% discount to U.S. equities, Ablin told me. Current valuations, he said, imply a 7.4% annual return for developed-market stocks over the next three years.

At roughly 1 times sales, emerging markets are even cheaper. “Emerging markets are trading at a 50% discount to the U.S., and that’s the biggest discount I’ve seen since 2002,” he said. That price/sales ratio, he said, suggests that emerging markets could return 20% annually over the next few years.

These are all projections, of course, based on historical performance, so they shouldn’t be taken literally.

But the trend is the thing. Right now, to our eyes, Europe is a huge mess.

The new radical Greek government looks set to dump the €300 billion European bailout deal. Russia is trying to gobble up eastern Ukraine. Islamist terrorists are running amok. And ,oh, by the way, the few European economies that aren’t in recession aren’t growing much.

But that’s just when inflection points happen. “Economic results out of Europe are starting to surprise, while the U.S. has started to disappoint,” Ablin told me.

“European results for the fourth quarter of 2014 were awful,” wrote John Authers in the Financial Times last week.

”And yet brokers are braced for earnings to rise 14.2% this year. … For all the risks in Europe, and the sluggishness in its economy, the market is convinced that companies are poised to turn around their profitability this year.”

For people looking to invest in this trend, Ablin likes Deutsche X-Trackers MSCI EAFE Hedged Equity DBEF, -0.64% or WisdomTree Europe Hedged Equity HEDJ, -0.85% . Both are, as their names suggest, hedged against the U.S. dollar DXY, +0.03% .

Over the last few years, many pundits have wrongly predicted this turnaround (Ablin nodded to it in an October 2013 interview with CNBC). Some major European bourses are outpacing the S&P thus far in 2015.

I’ve also been a big fan of U.S. markets for a long time. But Ablin’s argument is persuasive. All good things come to an end, and so will the U.S.’s current dominance of global markets. The only question is when.

“The next leg will be somewhere else,” Ablin declared, and he’s ready to put a lot of money where his mouth is. We’ll find out soon enough if he’s right on target or way too early.