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Foreign value investing, you need to be an expert to futures trade, return of a commodity bull,
This review is from: The Little Book of Bull Moves in Bear Markets: How to Keep Your Portfolio Up When the Market is Down (Hardcover)
1. Invest in foreign companies with a. high dividend earnings b. participating in global exports c. part of an economy that is growing (China, India, Brazil, Russia, Mexico).
2. If foreign currency is spent in the American market place, foreign dollars compete with domestic dollars sending prices higher.
3. Foreigners bought dollars. Foreign currency is converted to dollars to buy items in the American Market. As demand increases, dollar price increases.
4. Efforts to combat recession through stimulus measures mean more money chasing a given supply of goods, inflation.
5. The dollar will decline even though interest rates will inevitability rise. A nontraditional investment approach is required, getting out of the US dollar and into commodities, precious metals, and equities in foreign countries.
6. Timing when to invest was more critical than if to invest. As the global economy dropped into recession, foreign countries spent heavily to subsidize the dollar and massive buying of the dollar occurred. The perception was the US economy was the safe haven to move money. Foreign equities values dropped off sharply, as the recession deepened.
7. We have to compare changes in nominal prices to price changes in commodities (Precious Metals, Agriculture commodities). Commodities correctly adjust to inflation. Commodity price inflation is the standard by which to measure prices.
8. Foreigners accumulate dollars. If foreigners spend their dollars to buy American companies through sovereign wealth funds then earnings streams will be diverted back to foreign owners.
9. How to foreign governments adjust their currencies? Foreign government buy dollars (Buy), invest in US treasuries (Loan), and sell their currency on the foreign exchange (Trade). Adjusting the currencies is a way to export inflation. Foreign currencies gain less value against the dollar.
10. Rising import costs occurs simultaneously as the dollar value drops, along with the standard of living in America.
11. Prices rise as the result of the fed printing money. Rising energy prices increases inflation indexes.
12. As commodity prices rise then all currencies are losing value. The dollar was losing value faster than the euro but the euro, also was losing value.
13. As more agriculture products are produced, prices should be falling.
14. True economic growth causes prices to fall. Growth means produces are cheaper, unemployment low, and output increasing.
15. A recession sheds government debt. Debt can be temporary. Shed the debt and growth will resume.
16. The Inflation rate could be 8-10 percent. US Gross Domestic Product (GDP) is 2-3 percent. US manufacturing exports are growing. National Debt health is measured as a percentage of GDP.
17. Productivity measures the amount of consumer goods (Output) a business is capable of producing in a given time.
18. Unemployment rates exclude long-term unemployment counts. The result is over optimistic employment views.
19. Stocks that reinvest earnings as a way to financing growth are more speculative than stocks that payout earnings in dividends.
20. Wall Street has conditioned the public to believe that long-term capital gains potential of stocks is equal to bonds. Wall Street investment banking job is to sell stocks and keep clients happy.
21. As credit dries and discretionary spending collapses, companies will either scale back on volume or cut prices to turn a profit. It would seem logical that because cost to build the product decreases that the product price would decrease, but instead, price remains the same, and production decreases. As a result, GDP declines and the economy moves towards prolonged recession.
22. Asset prices (Real Estate) will fall much further in prices in relationship to Gold than goods prices (Gold).
23. Materials, Mining, energy, and agriculture commodities will benefit from the commodity boom.
24. Oil service companies (Service - Moat) are likely to prosper benefitting from oil market and unlikely to be hit with excess profit taxes. (Baker Hughes, Schlumberger, and Halliburton) Profit from the get-go.
25. Low commodity prices cause overutilization of resources and under-investment in capacity, resulting in low supply relative to demand. (Investment opportunity)
26. As a general rule, stock prices fall as commodity prices rise.
27. Domestic producers will face significant tax increases that foreign companies will not.
28. Gold is a wealth preserver, not a wealth gainer.
29. American Depository Receipts (ADRs) are foreign stocks listed on US stock exchanges. ADRs are receipts for foreign shares held in domestic bank vaults. ADRs pay dividends, entitle voting rights, and other shareholder rights. (Issued by Sony and Toshiba)
30. Developed foreign countries to watch: Austria, Beligium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Spain. Asia countries: Hong Kong, Singapore, Japan, Taiwan, South Korea, Thailand, and Philippines.
The ten strongest professions and industries in the next decade:
1. Engineering: Mechanical, electrical, computer science will be needed to rebuild the industrial base.
2. Construction: Construction will be strong for individuals who will rebuild America's roads, bridges, tunnels, public transportation systems, communication lines, and infrastructure.
3. Agriculture: US will grow its own food as imports become more expensive. Dollar devaluation will cause any item being exported to become more expensive as foreign money competes for the purchase of these items. There will be opportunity in agriculture in the coming decade, as trade imbalances correct.
4. Merchant marine: Merchant marine business will increase. As imports become more expensive, a demand for US shipping will increase to handle increased volume of exports.
5. Commercial Fishing: Commercial fishing and fish farming will be a growing industry. Currently, the US imports over 90 percent of the fish it consumes. As imports become more expensive, the US will grow its own fish.
6. Energy: As the dollar declines the price of oil will increase. Growth and consumption by China and India drove oil prices above $140 a barrel. The US exports over 300 billion barrels of oil a year.
7. Computers and high technology: The US will continue to remain a leader in computer manufacturing.
8. Entertainment: The US is a huge exporter of entertainment. As dollar declines oversea customer will purchase entertainment products, or US production facilities and talent and create product.
9. Automotive repair and small appliance repair: US consumers will be keeping their car on the road longer. Car repair skills will become more valuable.
10. Tailoring and Textiles: Rising prices will cut off the flow of inexpensive clothing items. There will be a growing need for tailoring and clothing repair. Import clothes will become more scarce and expensive.