Results 1 to 13 of 13

Thread: foreign investor perspective on American S&P

  1. #1
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default foreign investor perspective on American S&P




    The obvious point to recognize is that much of the 'apparent' run up in US stock prices is nothing more than a break-even US dollar versus home currency trade off for foreign owners of those US stocks ! Or from the perspective of US stockholders, the 20% 'apparent' short term gain will actually only buy 10% more in terms of 'real world' US dollar purchasing power compared to last May. But those gains will be taxed as if the 20% 'apparent' gain was real !!!

    ~
    Last edited by Melonie; 10-07-2009 at 03:21 PM.

  2. #2
    God/dess
    Joined
    Sep 2006
    Posts
    7,964
    Thanks
    6,155
    Thanked 10,183 Times in 4,602 Posts

    Default Re: foreign investor perspective on American S&P

    Wrong. In the US, prices fell a fraction of a percent over the past 6 months. The 20% short term gain will actually buy slightly more than 20% in purchasing power.

  3. #3
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: foreign investor perspective on American S&P

    In the US, prices fell a fraction of a percent over the past 6 months
    only true from a highly technical standpoint if, like the official gov't 'core CPI' statistics, one ignores such 'minor factors' as the rising cost of food / energy / taxes / raw materials - as well as ignoring the net price contribution of increased gov't subsidies i.e. $3,500 in gov't 'clunkers' payments reducing net new car prices.





    ~
    Last edited by Melonie; 10-07-2009 at 10:53 PM.

  4. #4
    Banned Eric Stoner's Avatar
    Joined
    Oct 2006
    Location
    NYC
    Posts
    5,150
    Thanks
    1,261
    Thanked 1,430 Times in 888 Posts

    Default Re: foreign investor perspective on American S&P

    Quote Originally Posted by eagle2 View Post
    Wrong. In the US, prices fell a fraction of a percent over the past 6 months. The 20% short term gain will actually buy slightly more than 20% in purchasing power.
    Are you trying to have your own facts again ? You claimed in another thread that the PPI went down by ignoring the most recent month i.e. you cited the July number and ignored the August increase.

    More importantly, do you seriously think that a declining dollar will not affect what we pay for imported goods and materials ? With supply and demand for oil relatively static for the last six months or so, the only other factor causing the price of a barrel to go from $40 to its current $70 is a declining dollar.
    Last edited by Eric Stoner; 10-08-2009 at 09:32 AM.

  5. #5
    God/dess
    Joined
    Sep 2006
    Posts
    7,964
    Thanks
    6,155
    Thanked 10,183 Times in 4,602 Posts

    Default Re: foreign investor perspective on American S&P

    Quote Originally Posted by Melonie View Post
    only true from a highly technical standpoint if, like the official gov't 'core CPI' statistics, one ignores such 'minor factors' as the rising cost of food / energy / taxes / raw materials - as well as ignoring the net price contribution of increased gov't subsidies i.e. $3,500 in gov't 'clunkers' payments reducing net new car prices.

    http://quotes.ino.com/chart/?s=NYMEX_RB.X09.E&v=d6



    ~
    How would you know? You don't even live in the US. There has been no increase in food / energy / taxes where I live and the price of gasoline has fallen significantly.

  6. #6
    God/dess threlayer's Avatar
    Joined
    Aug 2003
    Location
    Syracuse
    Posts
    5,921
    Thanks
    369
    Thanked 419 Times in 290 Posts
    My Mood
    Fine

    Default Re: foreign investor perspective on American S&P

    This all would make more sense of the primary traders in the S&P 500 were Euro traders. As it is you are comparing tangerines with kumquats apparently in order to make a point about the declining dollar. This has only an indirect effect on the US securities market to date compared to US industry expectations and trader confidence.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

  7. #7
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: foreign investor perspective on American S&P

    Try this perspective instead. 40% of the S&P shares are in the hands of foreign investors or proprietary accounts of big international financial firms. To avoid a rush to the exits by foreign investors, it's necessary to try and minimize their apparent S&P losses in terms of other 'home' currencies. But this is actually fairly easy to do while accomplishing another objective at precisely the same time. The US FED prints up new money ( devaluing the US dollar ), but loans this newly printed money at essentially zero interest rates to the big wall street banks ... who in turn use this newly printed money to purchase S&P shares via their proprietary accounts, causing the US dollar price of the S&P shares to rise.

  8. #8
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: foreign investor perspective on American S&P

    Quote Originally Posted by Melonie View Post
    Try this perspective instead. 40% of the S&P shares are in the hands of foreign investors or proprietary accounts of big international financial firms.
    Is this another one of your made up statistics? Or, do you count American financial firms as "international"?

  9. #9
    Banned Eric Stoner's Avatar
    Joined
    Oct 2006
    Location
    NYC
    Posts
    5,150
    Thanks
    1,261
    Thanked 1,430 Times in 888 Posts

    Default Re: foreign investor perspective on American S&P

    Quote Originally Posted by Zofia View Post
    Is this another one of your made up statistics? Or, do you count American financial firms as "international"?
    What difference does it make ? The point is still the same : the effect of devalued dollars and the resulting reluctance of foreign investors to invest when the value of that investment is sure to decline.

  10. #10
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: foreign investor perspective on American S&P

    do you count American financial firms as "international
    They're absolutely international ... from the part ownership by Saudi Princes right down to the Chinese business investments !!!

  11. #11
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: foreign investor perspective on American S&P

    Quote Originally Posted by Melonie View Post
    They're absolutely international ... from the part ownership by Saudi Princes right down to the Chinese business investments !!!
    So, of those 40% held by "international" big American investment firms, how much is held by Americans. And don't say 0% because I know that at least some Americans use "international" American investment houses.

  12. #12
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: foreign investor perspective on American S&P

    Quote Originally Posted by Eric Stoner View Post
    What difference does it make ? The point is still the same : the effect of devalued dollars and the resulting reluctance of foreign investors to invest when the value of that investment is sure to decline.
    It makes all the difference in the world. If the statistic is made up, then it's in no way persuasive. Melonie's own charts show that Euro denominated S&P investments in the US showed a 10% gain over the last six months. So, it's obvious that a devalued dollar does not make for a sure decline in US investments.

  13. #13
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: foreign investor perspective on American S&P

    If the statistic is made up, then it's in no way persuasive
    As usual, this can only be definitively proven once the US gov't establishes effective regulations over 'Dark Pool' stock trading.

    Melonie's own charts show that Euro denominated S&P investments in the US showed a 10% gain over the last six months
    True, but in comparison the DAX is up nearly 20% in EURO terms.

    The point is still the same : the effect of devalued dollars and the resulting reluctance of foreign investors to invest when the value of that investment is sure to decline
    Actually there are two important points, with foreign investors facing US dollar exchange rate losses being the primary one. But as other posts have accentuated, there is still a persistent 'US dollar bias' among Americans ... a bias which foreign investors, foreign governments, and foreign analysts are rapidly leaving behind !

Similar Threads

  1. Adult Film Investor Wanted - Investor Stars in Film
    By AdultFilms in forum For Sale & Wanted
    Replies: 1
    Last Post: 04-09-2016, 11:25 PM
  2. Replies: 5
    Last Post: 08-26-2009, 01:03 PM
  3. Replies: 22
    Last Post: 11-11-2008, 08:32 PM
  4. American business & marketing savvy will never die !
    By Melonie in forum Member Boards
    Replies: 1
    Last Post: 10-18-2008, 03:56 PM
  5. Replies: 0
    Last Post: 06-08-2007, 04:01 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •