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I shall preface this post by saying that with so many other things in my life to worry about (family, exams etc) I don't normally worry about the market too much. I fully subscribe to the theory that if you lie awake and worry about the shares you own - then you invested in the wrong companies.

BUT....

lately I have started getting concerned about the $US/$Aus currency and its potential impact on our market.

I have about 15% of my portfolio invested directly in the US (Berkshire, Fannie Mae and Mellon Bank) but I am concerned if I continue to buy shares in the US and the dollar goes up (or more specifically the US declines) then I am going to be on the losing side of the fence.

The other problem I think is that the Aussie market has been protected from the falls in the US market through the devaluing of our dollar. If you think you're still as wealthy as you were a year ago try buying something in US dollars - ouch!

I know in 10 years this will be just another pimple on the economic landscape but right now I feel like Woody Allen when he said "one path leads to destruction and total annihalation and the other to death - I hope I choose wisely"

Comments (strategies?) accepted gladly.


Anyway, off to Byron Bay for the weekend - maybe I will worry about it some more on Monday.

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Byron sounds nice, but 27 and blustery in Melbourne is not too bad either!

I have money in international trusts - can't be bothered with direct share investment - too many forms.

If I sell now - capital gains tax on whole lot. Would need a 25% appreciation of $A to redress it!

I bought my first Euro growth fund three months ago - now down 15% as Euro markets fell.

I think its best to hold on.

They always say "when everyone in the market is feeling miserable, then its nearly time to buy"

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I too have the same feelings....all the finacial advisers say you should divesify into global shares...you know the story.."the all ords makes up 1% of the world market" My portfolio is about 90% Aussie...so I too am looking to go a bit more O.S and have the same dilemna. Trouble is you will never pick the currency. Having been an expat in the U.K, I came back to Aus around 1995, when the Dow was 5,000 and the dollar above 75c. Every one told me..buy Aussie stocks, stay clear of the U.S..stocks are overvalued and our dollar is going to bounce back. (sound familiar!) the Aussie stocks have been O.K..but what a mistake on the O.S stocks. The way I look at is our country is being left behind and being ignored by the rest of the world(even the Olympics 6 months on has hardly helped) Our standard of living is falling..and who knows how much further it has to fall? I'l be pessimistic and say thigs won't get better until there is a fundamental change in Canberra and I mean fundamental..ie get rid of Canberra all together(I'm deadly serious) Take the chop to the beurocrats. Move the Capital back to Sydney or Melbourne and get serious about the on going waste of our money by governments. We need to get lean and mean. In all if you like an O.S stock then I reckon buy it now.
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I think it will get mean and lean pretty soon-
Not good news about the economy this morning!

Dont think I'll bother voting for either party next
election, they are all pathetic!!!FC
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I don't think Australia's standard of living is falling; its improving!

I'd like to see us plan to increase population over 100 years to 50+ million, which would gain us investment in a growing market! We'd then be comparable with France, Germany, Italy.

The ALP will pump-prime IT investment and education and that will lead us into growth again.

The Libs are lost in reducing deficits, and the Nats are lost in panic with Hanson's moans but ludicrous lack of policies.

Probably the Democrats will gain twice the vote this year as younger (40 and under) voters hop on their vision.

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Hope you're right Waverley-
Needs someone with some policies to do something soon..
I agree with Wappinghigh, a new broom through Canberra
would help, and remove a few fat cats who have been there too long...
Be nice to see the Democrats get up- I wish!
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Be nice to see the Democrats get up- I wish!

Lol- you got a great sense of humour FC



I hope.
JR
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Jono, how could they do worse---
we have had years and years of dreck with both parties,
Of course they would mess up to start with, but dont they all-
Not possible anyway..

I dont care really, so long as we get less of what we've got now!
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so long as we get less of what we've got now
Yep that I like.

It's just the demo's fall over for the right deal they always have it's like a tradition & those sorta things are hard to stamp out.

But it is a reflection of the complete contemp most people have for the two main parties.
Look how many people vote for Hansen.
I suppose better to vote Demo.
JR
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Quite frankly...I'm so peaved about Canberra at the moment I resent being made to vote at all. They simply don't deserve it. I reckon if voting was really democratic (ie NON compulsory) they would sure get the message...an abset turnout from the electorate!
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Survey says that the men actually vote for Pauline because she has great legs-
Now John and Kim have no hope on that score!!!
FC

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Survey says that the men actually vote for Pauline because she has great legs-
Now John and Kim have no hope on that score!!!


LOL

Bugger hadn't noticed her legs yet, that changes everything, I'll take a better look next time.

Thank god men aint voting for her character.
JR
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Possibly her lungs too.
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How do you feel about margin?

If you have a margin account & effectively borrow against your existing US holdings to buy Aussie or other non-US ADR's, you will be benefitting from any fall in the US dollar - you are effectively shorting the US dollart. The trick of course is coping with the margin & choosinng the shares to buy using it.

a couple more thoughts;
- there are things called WEBs available for Australia - they are a sort of index product which might give you diversified exposure to Australian stocks - but may not work well in combo with margin.
- if you're worried that the US dollare is high against the euro, etc, you might want to consider non-aussie investments
- there are sites on adr's like www.adr.com


this isn't intended as personal advice, but rather some ideas you might want to think about. the big drawback of course is that you'd be using margin


peter xyz
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What a good idea!!

It doesn't suit my temperament but I think it is a good solution to the problem. The only form of leverage I use are Instalment Warrants on my bank holdings in Oz.

I noticed in your profile you're also a QBE holder - ditto, about 6% of my portfolio and held it for a number of years now.

It sounds like we have fairly similar investment ideas and you're either in Australia or NZ - a couple of my other holdings which I think are good companies run by great people are Hunter Hall International (HHL) run by a guy called Peter Hall and Sabre Group (SBE). Check them out and let me know what you think.

Hunter Hall I think is overpriced at the moment and I have a value of about $1.35 - $1.45 on it, but Sabre Group is excellent value at present prices and most of their profits come from the UK.

I will have to go back to the drawing board and give your idea some more thought....

thanks
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<If you have a margin account & effectively borrow against your <existing US holdings to buy Aussie or other non-US ADR's, you will be <benefitting from any fall in the US dollar - you are effectively <shorting the US dollart. The trick of course is coping with the margin <& choosinng the shares to buy using it.

I liked this idea as it seems like a natural hedge against currency rates. The only way I have found to do it is to go through an international broker like solomon smith barney. They will set me up with an US account and then I can margin lend(paying 8% to 9% interest) up to 50% on say a stock like cisco . Any ideas on how to get a lower interest rate or to get a higher level of gearing?

Paul.
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Those levels don't seem unreasonable - you can always go directly to someone like E*Trade, etc if you're happy with an online broker - perhaps try the board for overseas investors (investing in the US market) - can't recall the name.

also 'WEBS' or other ETF's (Exchange Traded Funds) are worth investigating.
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