$$$$ women or 360/430 F car

Actually, the smart money is buying dollars right now, because it is at an all time low against the Euro. But, some of the comments I have seen on this board are anything but "smart money."

 

Although we all digress, your points are well taken, but I have met as many fools at $1,000 a plate dinners as in beer bars. Taking advantage of opportunity presumes "opportunity". Many years ago while taking a trip in my Volkswagen around the country (sleeping in the back with the seat removed) I stopped in Cleveland and opened the trunck . A little boy came up to me and said "where is the engine", I thought he was joking. I thought "everyone knows a VW engine is in the back", well he did not because he never saw one. As someone who first found out about college while serving in Viet Nam (I asked superiors how they became superiors and they said "college"), and now can spend my time engaging in this (questionable) forum chat, I bear witness to the fact that we should all be held accountable and there is no denying personal responsibility, but living under a mushroom is far less advantageous that growing up with parents who can spell "stock market". According to statistics, more than half the worlds population lives on $2.00 a day. I will spend that much driving from my house to the gas station. Best

 

I agree with everything you said, just a couple of points. First, I said hard work PLUS using one's head generally leads to success. Finally, we all know there are investments with high rates of return but risk increases with return, but for the purposes of this thread, avoiding a 7% loan on a toy is a guaranteed return.

Best,
Dave

 

No it isn't.

The least of our problems.

Some individual businesses will realize benefits of a weak dollar (those few that still manufacture here) but we are running a trade deficit not a surplus. Also, it is irrefutable that a weakening dollar pushes inflation. That’s the last thing we want now. How could inflationary pressure be good in an economy where consumer spending is key and is starting to fall? Also, how could a weak dollar in the face of oil supply constraints be a good thing? It’s not.

The US consumer is stretched to the breaking point already. As we know, gas acts like a tax. With no substitutes, its increase in cost goes straight to one’s bottom line. Most commodities are at an all-time high including gas, milk, steak…….gold (because everyone is running scared). Consumer spending is the biggest thing that drives our economy. The more the American consumer gets hurt, the worse it is for our economy. Even if you are rich and don’t feel the pinch now, when the consumer goes away, everyone will.

I think the biggest problem is our excessive borrowing. Debt fuels economic growth only so far until diminishing returns set in. Monetizing U.S. debt expands money supply which tends to dilute the value of dollars already in circulation. Additionally, over time, excessive government borrowing can crowd out business borrowing which reduces national income. Our expanding the pool of money puts downward pressure on the dollar, downward pressure on short-term interest rates and upward pressure on inflation. Ideally, the dollar and all nations' currencies should be valued at a level that is neither too high nor too low. Such a level would help sustain long-term economic growth and stability both here and abroad.

 

Beyond all the expert advice already listed, I would like to throw in my own .02 cents worth.
I know what the car looks like but need to see some pics of the $3k per night women to finish my thoughts on the question..............................................

 

Nice B School lecture. However, the reality is that the Euro economies are under pressure to lower the value of the Euro as soon as possible to spur employment in their markets. I was party to a conference call with a high ranking official of the German National Bank (equiv of the Fed here) and the consensus in Europe appears to be that the Euro will drop into the mid 1.30's against the dollar over the coming 18 months. These are markets at work and they tend to equilibrium, but along the way they swing past that point and work their way back, in both directions. I've been around long enough to understand these mechanisms and more importantly to take advantage of the overswings either way. But the fact remains that the US manufacturing sector is quite strong because of the weak dollar, even though many of the plants are foreign owned like the Japanese and German carmakers who are solidly entrenched here and exporting US made cars.

The real problem with large US companies is the inordinate potential liabilities they face in funding health care and pensions of retired workers. Once again Unions have dealt a devastating blow to enterprise and the only way for many of the air carriers, and most likely GM and Ford, will be bankruptcy.

Ed, you should find a job in the real world where you are charged with making money, and not being a fee based service provider. You will find your perspective changes somewhat. Your business will be important and you won't worry so about how the other guys are doing except to look for their weakness and take advantage of it. That's how you get buy Ferraris without borrowing.

 

That wasn't a B-school lecture but I will try to make my points more understandable.

First of all, manufacturing only represents around 10% of the US economy. The fact that US manufacturing is doing great while the rest of our economy as a whole looks awful quite nearly makes my case for me. We should be, and are, more worried about consumer spending. The low value of the dollar hurts the American consumer. Yes, the Europeans are indeed being hurt by the high value of their currency. As I stated in the second to last sentence of my last post, a currency valued too high is also a problem. Now to get back on point: The economic plan that is going to be enacted is being put into action to prop up the American consumer as it should be. While US manufacturing has benefited from the weak dollar, a weak dollar and its benefits to domestic manufacturing yields a net negative to the broader economy at the present time.

Finally, I am emphatically not a fee-based provider. Also, I AM charged with making money and I do make money. Making money when you have money is easy. As you know Alex, making your first million is the hardest. I am getting there slowly but surely. I was luckier than most in that my parents paid for undergrad tuition but everything else since then has been all me and I’m doing okay.

 

It's all nice and dandy (the economic lessons/discussions) but I (as others here also) am more interested in seeing those $3k a night women...

 

Well, since we're talking B-School Basics....

With both purchase contracts in US Dollars and simple hedging of currency fluctuations, my industry is thriving while manufacturing nothing in the US. Anyone ignoring the cyclic history of markets and allowing themselves to be driven by short-term greed should get hurt......you learn more that way.

 

I love really generous guys like you, original poster.

But my looks gets me the Ferrari and the thousands of $$ or €€!!! Come on, step it up.

 

Glad to see that you--indirectly--confirmed my point. The dollar is cheap right now and the smart money is in dollars. Short the Euro, and you will make some money.

Look, too, for China to gradually uncouple its currency from the fixed exchange rate. When this happens, the dollar will strengthen.

By the way, the $3000 per night women can be found on a variety of sites. Just search, Las Vegas or Los Angeles plus escorts. You can then click to various cities.

Not that I would know from personal experience, but this is what a buddy told me. And, he also told me that for $500 per hour, you can travel to the moon, without leaving earth. Um, yea, that's it, to the moon. At least that is what my buddy said. No really he did say it.

 

That's a classic!!!

 

Charge me? Please. I would charge them!!!

I accept cars or high amounts of cash.

 

Bear a couple small things in mind


1. For business owners, there are tax benefits to financing or leasing. That's why I do it. Any money paid from pocket is not considered.

2. Letting money rot in your bank costs you in inflation, which averages about 3-4% a year.


3. As you know and have alluded to, having cash-in-hand is a very valuable asset. Probably better to use it for investments and return a higher dividend than to throw it down the toilet on a depreciating asset. It also helps if you have gap insurance

 

I would like Mimi Miyagi.

 

Interesting point of view. I have to disagree however. First, US dollar is not fine especially with strongs signs of inflation. Gas prices and other inelastic goods are true signs of this. When your cost of living goes significantly up, I would have to disagree that the $ is fine. One also has to remember that this is a global economy. Countries tend to trade more with those who have more favorable terms and conditions. US is a relative decent size of the pie but is not the only trading partner. With developing countries gaining in wealth, Ferrari is a good example of develop that cliente for commerce.

 

so let me ask you this - what are you using to buying US $? Opportunity costs and highest rate of return applies, ie, you keep it under the pillow or money market, what's your aggregate return?

Also if you look at the economic outlook, I would have to venture by saying that buying dollars now is very much premature. Are you also saying that the economy is on the recovery?

 

With due respect, I believe you have no understanding of commodity and currency markets. Traders trade every day, buying and selling currency both in the current market as well as purchasing and selling future contracts at defined prices. There is not a multinational business on the planet that doesn't do some currency hedging to protect themselves against swings in currency values.

The consensus among currency traders I speak to are of the opinion that the dollar will slowly strengthen over the next 18 months. I'd say this is a great time to raise Euros for US asset investments. The US assets are probably somewhat discounted due to illiquidity in US banks and the Euro is currently buying Dollars at a nice discount as well. These conditions will go the other way eventually, as they have for as long as there are economic cycles. When this happens the purchase in Euros will yield extra normal profits in Dollars when the assets are sold down the line.

 

What a surprise another company manufacturing overseas. Also, any company worth a darn doing business overseas should/do have a FOREX market strategy to at least hedge risk if not make arb.

 

We'll see.

I agree.

 

point taken. My experience as a CFA in my past life is with trading both Emerging/Brady Bonds for a large money manager and also hedging as part of interest rate/currency swaps. My specific reply however was to the individual and comment of buying USD now which equates to buying at spot vs a future contract/forward points be it on 180 or 360 again on an individual micro level. Nevertheless, good points.

 

Our currency value and economic health are not perfectly correlated.

 

Prudent public companies hedge currency exchange. Management of public companies which arbitrage often find themselves unemployed.