Dollar on the up time to cash in
Discussion
The buzz in the last Sunday Times that the US Dollar is on the rise and it may be a good time to make a share investment in a US company.
Does anyone have a practical experiance as to who are the best people to buy shares listed on the US exchanges?
Also does anyone have any good share tips for the US market, particulary ones that will not be affected badley by a rising dollar.
Does anyone have a practical experiance as to who are the best people to buy shares listed on the US exchanges?
Also does anyone have any good share tips for the US market, particulary ones that will not be affected badley by a rising dollar.
Probably not much help, but if the prediction is that the dollar is going to get stronger, doesn't it make more sense to buy dollars now and sell them in the future?
So, easy numbers (more for my benfit)....
Today £1 buys you $1.5. So you buy 10000 pounds worth of dollars = $15000
In the future, £1 buys you $1.2
Your $15000 is now worth (15000/1.2) = £12500
If the prediction is on dollars why would you invest in a US company, with all the associated risks of doing so? Why not invest in the currency instead?
(This coming from someone who lost $6mil in stock during the dotcom bubble burst and is still pissed off by it)
So, easy numbers (more for my benfit)....
Today £1 buys you $1.5. So you buy 10000 pounds worth of dollars = $15000
In the future, £1 buys you $1.2
Your $15000 is now worth (15000/1.2) = £12500
If the prediction is on dollars why would you invest in a US company, with all the associated risks of doing so? Why not invest in the currency instead?
(This coming from someone who lost $6mil in stock during the dotcom bubble burst and is still pissed off by it)
? aceparts_com said:
I'd love to hear that story!
Well, pull up a chair then
I joined a (soon to be) dotcom company in 97. I was one of the earlier employees and was attracted by the potential of a stock market flotation. The first Nasdaq forms had been sent in, and the pre-IPO roadshow was due to start 12 months later.
Stock floated at $12 - so that's the strike price I could buy at, irrespective of the actual stock market price. So things are ticking along nicely, price goes up to about $40. Then things go a little bit haywire and some big deals start coming in. The market picks up on this and soon the price is around the $150 mark. So the company decides to reduce the cost of the individual stock - so a split is in order. So now I have double the number of stock, but each one has been reduced in value to around $70. But more deals come in and the stock price shoots up again and again, and eventually peaks at $330 (or in pre-split terms, $660). So for every bit of stock I have it's worth (660-12)=$648. I have 10000 stock options, all vested all ready to be cashed in.
And then it happens.....
It would appear that there had been some creative accountancy going on. A 'normal' company wouldn't book future revenue on todays books. Let's say a deal for $100mil comes in, but the payment is to be spread over 10 years. That would mean you could book $10mil every year, but not (as this company were doing) book $100mil up front. Essentially, they were lying to the market by misrepresenting the actual cash going through the business. The argument against 'lying' is that, at the time, the rules for dotcom companies (as opposed to, say, software companies) were open to intepretation. It all went a bit wrong at that point, Nasdaq got shirty, the market lost confidence and within a day the stock was worth about $4 and the company was in danger of being delisted.
Thing is, my old boss still owes me for a new television. He was interviewed on the BBC9oclock news that night and was asked "How does it feel to have lost the most money in a single day of trading, ever?" He replied "It comes, it goes, right?". I threw my mug of coffee at the screen, and it went straight through
He lost $27billion that day.....
Thing is, my old boss still owes me for a new television. He was interviewed on the BBC9oclock news that night and was asked "How does it feel to have lost the most money in a single day of trading, ever?" He replied "It comes, it goes, right?". I threw my mug of coffee at the screen, and it went straight through
He lost $27billion that day.....Where is the best place to buy a reasonable amount of dollars? Well, foreign currency in general.
The high street gives you nothing close to the market values. For example, Thai Baht are running at around 75/£. In UK the high street will give you around 68/£ wheras at Bangkok airport you'll get closer to 73/£
The high street gives you nothing close to the market values. For example, Thai Baht are running at around 75/£. In UK the high street will give you around 68/£ wheras at Bangkok airport you'll get closer to 73/£
Sorry to hijack your thread rr-eng
In the past I've used E*Trade www.etrade.com and that was pretty good. The deals get better the more trading you actually do. Practically instant trade guarantee, very helpful Research section, and you can call a UK office (in Canary Wharf I think) for info. Very easy process to set up a US Brokerage account too.
As for share tips, I don't give them out anymore But you could have a look through www.fool.com
In the past I've used E*Trade www.etrade.com and that was pretty good. The deals get better the more trading you actually do. Practically instant trade guarantee, very helpful Research section, and you can call a UK office (in Canary Wharf I think) for info. Very easy process to set up a US Brokerage account too.
As for share tips, I don't give them out anymore
But you could have a look through www.fool.comRR-Eng said:
The buzz in the last Sunday Times that the US Dollar is on the rise and it may be a good time to make a share investment in a US company.
Does anyone have a practical experience as to who are the best people to buy shares listed on the US exchanges?
Also does anyone have any good share tips for the US market, particularly ones that will not be affected badly by a rising dollar.
Rather then buy individual shares it would be safer to buy a unit trust whose fund manager specialises in american equities.
I use XETrade.com, they give you about 70-100 pips off spot, and I also use citibank, who routinely change their spread but it can be very competitive at times, and as there is no charge for transferring the money between my USD and GBP accounts, this saves the cost of the transfer charges to and from. Citibank can be as far as 200 pips and as near as 90 pips from spot. It seems they are slower to react to price drops and price rises.
Also you can try your bankers, you might get a good rate. Some clearers (RBS) offer good rates for businesses anyway. Majority of my business purchases are from abroad and in USD, and as they are usually longish term (120 to 240 days) via L/C, open credit or bank guarantee, I need to achieve a good future rate.
Beware that xetrade will not really allow you to use their system for speculative purposes (I think that falls within needing to be regulated), therefore as long as you are not lying that you need to transfer the money to pay invoices or for your own personal use (i.e. holidays)
Finally I have heard some brokers who deal for speculation on margin will allow you to settle on the exchanged sum (value date two days), but unfortunately I can't remember which dealer told me that and I can't find it anywhere!!! If you find them, let me know too!
I have been since March 05 buying USD (actually buying outright, not on margin). So far the best rate I bought at was 1.90 (I knew I should have bought at 1.94 and regret it!!), with the worst being 1.80. If you are doing small lots like me (£10K GBP each time) then probably 70-100 pips off spot is the best you'll get. I was a bit afraid of going in straight with £100K GBP in case it went against me. Now I regret that, but my average rate on it all is 1.87 so I've made at least a few grand.
I tell you what, the Euro is tanking against USD at the moment, so it might be worth (which is what I'm doing) selling (shorting) the euro against the dollar. So those of you who have euro's, might be worth doing that. Bear in mind that there is also an interest incentive with USD. Currently Euro has been suffering due to political problems, namely the two rejections of the referendum, and this weekend there has been even more anti euro talk coming out of Italy adding to the close of the week. Monday should be interesting, but Euro is heavily being sold atm. It might be at a point where its oversold, but I thought that on Friday and lost some money (I was on margin, which can hurt or help you). There's talk that it might get to 1.20 before a retrace. GBP seems oversold atm, so it might be worth waiting, or hedging your bet and investing half of your proposed sum now incase. It seems due a retrace to 1.84 or so before dropping back again. There are two points which are cause for concern for GBP, 1 is the BOE possibly reducing interest rates, and 2 the general economic situation in the UK is pretty poor. House price inflation amounted to only 0.3% rise in May. That being said, some of Euro's pain is effecting GBP also, and so USD is making some moves on GBP too.
Sorry, fecking long post, but hopefully it is of some use.
Also you can try your bankers, you might get a good rate. Some clearers (RBS) offer good rates for businesses anyway. Majority of my business purchases are from abroad and in USD, and as they are usually longish term (120 to 240 days) via L/C, open credit or bank guarantee, I need to achieve a good future rate.
Beware that xetrade will not really allow you to use their system for speculative purposes (I think that falls within needing to be regulated), therefore as long as you are not lying that you need to transfer the money to pay invoices or for your own personal use (i.e. holidays)
Finally I have heard some brokers who deal for speculation on margin will allow you to settle on the exchanged sum (value date two days), but unfortunately I can't remember which dealer told me that and I can't find it anywhere!!! If you find them, let me know too!
I have been since March 05 buying USD (actually buying outright, not on margin). So far the best rate I bought at was 1.90 (I knew I should have bought at 1.94 and regret it!!), with the worst being 1.80. If you are doing small lots like me (£10K GBP each time) then probably 70-100 pips off spot is the best you'll get. I was a bit afraid of going in straight with £100K GBP in case it went against me. Now I regret that, but my average rate on it all is 1.87 so I've made at least a few grand.
I tell you what, the Euro is tanking against USD at the moment, so it might be worth (which is what I'm doing) selling (shorting) the euro against the dollar. So those of you who have euro's, might be worth doing that. Bear in mind that there is also an interest incentive with USD. Currently Euro has been suffering due to political problems, namely the two rejections of the referendum, and this weekend there has been even more anti euro talk coming out of Italy adding to the close of the week. Monday should be interesting, but Euro is heavily being sold atm. It might be at a point where its oversold, but I thought that on Friday and lost some money (I was on margin, which can hurt or help you). There's talk that it might get to 1.20 before a retrace. GBP seems oversold atm, so it might be worth waiting, or hedging your bet and investing half of your proposed sum now incase. It seems due a retrace to 1.84 or so before dropping back again. There are two points which are cause for concern for GBP, 1 is the BOE possibly reducing interest rates, and 2 the general economic situation in the UK is pretty poor. House price inflation amounted to only 0.3% rise in May. That being said, some of Euro's pain is effecting GBP also, and so USD is making some moves on GBP too.
Sorry, fecking long post, but hopefully it is of some use.
Interesting thread folks.
I've been in and out dollar v euro over the past few months. Also sterling v rand, but that's another story
What sort of time frame are you looking over? I still feel the dollar will weaken in the longer term with the increasing strength of china in the world markets. But then if Berkshire Hathaway can get it so wrong on the dollar you have to question all your assumptions i guess.
I've been in and out dollar v euro over the past few months. Also sterling v rand, but that's another story
What sort of time frame are you looking over? I still feel the dollar will weaken in the longer term with the increasing strength of china in the world markets. But then if Berkshire Hathaway can get it so wrong on the dollar you have to question all your assumptions i guess.
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