Dumping US stocks, so what %repositioning?

I am dumping most of my US Domestic Stocks, except for a few
funds that have performed great this past year, which I will keep an eye
on. I want to reposition my money into international funds, gold and
precious metals funds, energy/oil funds, and some cash. Any
thoughts on what would make for a good allocation should the US Dollar
come to its demise in the coming years?

Currently, I have some funds in asia, latin america, europe,
emerging europe and mediterranean, media/technology, health; just dumped
some blue chip and growth domestic US funds.

Any advice appreciated.

Re: Dumping US stocks, so what %repositioning?

"Proteus" <> wrote in message
news:
>I am dumping most of my US Domestic Stocks, except for a few
> funds that have performed great this past year, which I will keep an eye
> on.

Why?

I want to reposition my money into international funds, gold and
> precious metals funds, energy/oil funds, and some cash. Any
> thoughts on what would make for a good allocation should the US Dollar
> come to its demise in the coming years?

Why?

>
> Currently, I have some funds in asia, latin america, europe,
> emerging europe and mediterranean, media/technology, health; just dumped
> some blue chip and growth domestic US funds.
>
> Any advice appreciated.
>
>

Re: Dumping US stocks, so what %repositioning?

On Sat, 01 Oct 2005 22:06:42 -0700, NoEd wrote:
> "Proteus" <> wrote in message
> news:
>>I am dumping most of my US Domestic Stocks, except for a few
>> funds that have performed great this past year, which I will keep an eye
>> on.
>
> Why?
> ...


Read the book "Demise of the Dollar". US dollar is tanking against
foreign currencies, US debt and trade gap is growing exponentially, US
trade deficit is out of control. US consumer debit and spending is out of
control. Warrent Buffet, in 2003 for the first time in his life, began
buying foreign currencies-- to the tune of $12 billion by year end; he
cited continuing weakness of the US dollar as his reason. Bu 2005
Buffet's foreign holdings increased to $20 billion. Look at
price of gold, growing higher each year since 2001 (9/11), a confirmation
of global uncertainty and hinting at the demise of the US dollar, based on
a fiat money system since Nixon eliminted the backing of the dollar by
gold. US dollar is now based on funny money, rather than any clear value.
Hey, I am an American, I love America, but I see our dollar becoming
worthless, much like the Mexican peso was several decades ago. Other fiat
money systems throughout history have tanked, I fear the dollar is going
the same route,

Any analysis of portfolio performance in just about any mutual fund will
confirm what is happening. Compare blue chip funds (lousy returns for
several years, 0-5% or so) with foreign funds, precious metals/gold funds,
oil/energy funds; those have all done exceptionally well (30-60% or so).

Re: Dumping US stocks, so what %repositioning?

When the US stockmarket gets a cold, the other stockmarkets tend to get
ebola. Some exceptions for a cut off economy (Egypt?), but in the
globalized world other stockmarkets tend to be not only coupled but an
amplifier of US results, either up or down. Exasperating... keep
wishing for more diversity.

The handwringing about perverse financial behavior of US has taken a
reversal with the latest survey of the world ecomomy by a long time
critic of much US behavior, The Economist (previous issue was headlined
shaming of america). See a library copy; this is only about the first
page out of about 20


Has a new theory about how the apparent financial balances originating
outside the US, and the US simply being a rational opportunist to take
advantage of (thankfully, since is jump starting world economy). Yes,
it makes sense that poor countries are saving like crazy and giving to
US to borrow like crazy. The poor countries have lousy safety nets and
unreliable borrowing networks for when in need. So as they get more
wealthy, they still have a top priority to build emergency funds, and
in the US the reverse applies. Actually it is the foreign corporations
that do most of the savings since they have lousy investment prospects
at home vs the US (Even China is saving more and more as their
investment prospects are shakey as their stockmarket).

Well, I don't do justice, but it is a hugely respected voice that seems
to be saying, wait a minute, this is a different and maybe more
sensible new world than we thought. Anyway, why not make a 4 way play.
Emerging market stock fund and emerging bond fund; pimco and fidelity
have both. Developed foreign stock fund (pid?) and developed foreign
bond (like pimco pfodx or the non-us-hedged pfbdx which has been death
spiraling with dollars recent rise)

Re: Dumping US stocks, so what %repositioning?

On Sun, 02 Oct 2005 12:45:47 -0700, dumbstruck wrote:

> When the US stockmarket gets a cold, the other stockmarkets tend to get
> ebola. ...

When that happens, don't gold and precious metals always go up?

Re: Dumping US stocks, so what %repositioning?

"Proteus" <> wrote

> On Sun, 02 Oct 2005 12:45:47 -0700, dumbstruck wrote:
>
>> When the US stockmarket gets a cold, the other stockmarkets tend to get
>> ebola. ...
>
> When that happens, don't gold and precious metals always go up?

No, and the blanket statement that all other stock markets get ebola is also
false.
Be careful what you believe, only some of it is true.

Re: Dumping US stocks, so what %repositioning?

On Sun, 02 Oct 2005 16:58:31 -0400, Ed wrote:
...
> No, and the blanket statement that all other stock markets get ebola is also
> false.
> Be careful what you believe, only some of it is true.

I do objectively notice that while the us market has remained relatively
flat for years now, foreign markets and gold have risen, substantially.
Same (risen) for energy and precious metal stocks. Almost across the board.

Re: Dumping US stocks, so what %repositioning?

"Proteus" <> wrote in message
news:
> On Sat, 01 Oct 2005 22:06:42 -0700, NoEd wrote:
> > "Proteus" <> wrote in message
> > news:
> >>I am dumping most of my US Domestic Stocks, except for a few
> >> funds that have performed great this past year, which I will keep an
eye
> >> on.
> >
> > Why?
> > ...
>
>
> Read the book "Demise of the Dollar". US dollar is tanking against
> foreign currencies, US debt and trade gap is growing exponentially, US
> trade deficit is out of control. US consumer debit and spending is out of
> control. Warrent Buffet, in 2003 for the first time in his life, began
> buying foreign currencies-- to the tune of $12 billion by year end; he
> cited continuing weakness of the US dollar as his reason. Bu 2005
> Buffet's foreign holdings increased to $20 billion.

And, to be fair, one must note that up to this time, he's lost some hundreds
of millions of dollars on this strategy.


> Look at
> price of gold, growing higher each year since 2001 (9/11), a confirmation
> of global uncertainty and hinting at the demise of the US dollar, based on
> a fiat money system since Nixon eliminted the backing of the dollar by
> gold. US dollar is now based on funny money, rather than any clear value.
> Hey, I am an American, I love America, but I see our dollar becoming
> worthless, much like the Mexican peso was several decades ago. Other fiat
> money systems throughout history have tanked, I fear the dollar is going
> the same route,
>
> Any analysis of portfolio performance in just about any mutual fund will
> confirm what is happening. Compare blue chip funds (lousy returns for
> several years, 0-5% or so) with foreign funds, precious metals/gold funds,
> oil/energy funds; those have all done exceptionally well (30-60% or so).

Diversification.

Mike

Re: Dumping US stocks, so what %repositioning?

On Sun, 02 Oct 2005 22:23:31 +0000, MichaelC wrote:
>> Warrent Buffet, in 2003 for the first time in his life, began
>> buying foreign currencies-- to the tune of $12 billion by year end; he
>> cited continuing weakness of the US dollar as his reason. Bu 2005
>> Buffet's foreign holdings increased to $20 billion.
>
> And, to be fair, one must note that up to this time, he's lost some hundreds
> of millions of dollars on this strategy.
>
>

I am not sure what he invested in, but yesterday I was looking at mutual
funds in europe, emerging europe, latin america, precious metals, energy,
and 90% of them did 30%+ returns each year on average for the past several
years. That, coupled with rising price of gold and stagnant blue chips,
tells me something is afoot. What am I missing?

Re: Dumping US stocks, so what %repositioning?

"Proteus" <> wrote in message
news:
> On Sun, 02 Oct 2005 22:23:31 +0000, MichaelC wrote:
> >> Warrent Buffet, in 2003 for the first time in his life, began
> >> buying foreign currencies-- to the tune of $12 billion by year end; he
> >> cited continuing weakness of the US dollar as his reason. Bu 2005
> >> Buffet's foreign holdings increased to $20 billion.
> >
> > And, to be fair, one must note that up to this time, he's lost some
hundreds
> > of millions of dollars on this strategy.
> >
> >
>
> I am not sure what he invested in, but yesterday I was looking at mutual
> funds in europe, emerging europe, latin america, precious metals, energy,
> and 90% of them did 30%+ returns each year on average for the past several
> years. That, coupled with rising price of gold and stagnant blue chips,
> tells me something is afoot. What am I missing?

That relative currency value doesn't correlate well to the equity markets.
(Thank God.)

Mike

Re: Dumping US stocks, so what %repositioning?

Proteus wrote:
> I do objectively notice that while the us market has remained relatively
> flat for years now, foreign markets and gold have risen, substantially.
> Same (risen) for energy and precious metal stocks. Almost across the board.

For precious metal stocks and commodities and the special case of Japan
stocks, see the following 16 year chart that shows essentially
flatlining against soaring SP500. Yeah, gold slightly counters the
stock trend (these are stocks, not the material itself - poke around in
yahoo to see exact components).


Now look at 16 years of the other foreign indexes vs sp500 that shows
essentially copycat. Esp memorable was the crash years 2000-2003 where
you watch the euro indices at US market opening time and whatever
direction they had drifted in would be immediately changed to the same
direction as US opening, but in stronger extent (thus "amplifier").
This has been so true in the last globalizing years that it's widely
remarked on, and everyone looks for some exception of "decoupling".
Here is US vs Germany, France, UK, Swiss...


Lastly look at exchange rates last 5 years - not so awfully much
decoupling

That little bump by new zealand raises an idea. For the most part you
can plug in various other countries which generally follow the same
patterns except the very little ones. I wonder if you made a fund of
little countries (different than fismx for instance which is small
stocks of foreign countries) - would you get true decoupled diversity,
or would they just average out to equal germany or something?

Anyway, food for thought at a brainstorming level. It has been so easy
to beat sp500 domestically anyway, that has been about the sickest
component (large cap growth/blend?). Japan may provide true
diversification if you dare.

Re: Dumping US stocks, so what %repositioning?

Neither am I - though I've seen good, very good things from perceptive
proponents arguing international exposure. See what you want, Buffet's
losses included; it's been, so far, a good cruise to me. However,
cognisance is another matter. There are sizable risk factors on this
tanker I'm encountering. And, "amplification" along those trends, I
fear, might render one deaf in short order. Definately in my 5-star
touchy-feely classifications, India, N. Korea, and a likes. Yeah - I,
too, went international midyear. It reminds me of a place where I
needn't hesitate fold, like the proverbial house-of-cards, if
conditions warrant.

Proteus wrote:
> > And, to be fair, one must note that up to this time, he's lost some hundreds
> > of millions of dollars on this strategy.
> I am not sure what he invested in, but yesterday I was looking at mutual
> funds in europe, emerging europe, latin america, precious metals, energy,

Re: Dumping US stocks, so what %repositioning?

Proteus wrote:
> On Sun, 02 Oct 2005 22:23:31 +0000, MichaelC wrote:
>
>>>Warrent Buffet, in 2003 for the first time in his life, began
>>>buying foreign currencies-- to the tune of $12 billion by year end; he
>>>cited continuing weakness of the US dollar as his reason. Bu 2005
>>>Buffet's foreign holdings increased to $20 billion.
>>
>>And, to be fair, one must note that up to this time, he's lost some hundreds
>>of millions of dollars on this strategy.
>>
>>
>
>
> I am not sure what he invested in, but yesterday I was looking at mutual
> funds in europe, emerging europe, latin america, precious metals, energy,
> and 90% of them did 30%+ returns each year on average for the past several
> years. That, coupled with rising price of gold and stagnant blue chips,
> tells me something is afoot. What am I missing?
>
Here are some changes measured in pounds from the UK since 7 Dec 2000.

HSBC American Index fund has declined 25%

The S&P500 has only declined 9%, so most of the other 16% is presumably
a decline in the dollar against the pound.

The US dollar has, in fact, gone from 1.44 per pound to 1.769 a decline
of 19%.

Looking at Europe, The HSBC European Index fund, in GBP, has declined by 7%.

The exchange rate shows that the Euro has appreciated by 10% against the
pound so European stocks would appear to have dropped by 17% in that time.

It would seem that, in their own currencies, European stocks have done
rather worse than US ones since the end of 2000. What you are looking at
is exchange rate variations. The decline of the dollar against the Euro
by 26% has meant that European stocks would have risen by this amount as
seen from the USA even if unchanged in their own currencies.

The dollar seemed to reach a minimum against the Euro in Jan 2005 and
has generally risen since then so buying foreign stocks in the USA may
no longer be a good idea. As always with stock markets one knows what
one should have invested in but not what one should do next. :-)

Getting away from Index funds and all-stock indices, Merril Lynch Latin
American fund has made an annualised 61% in each of the last 3 years in
USD showing the benefits of sector funds, if you can guess right or
latch on to the winners.

Re: Dumping US stocks, so what %repositioning?

East Europe is most consistantly at parity within an immediacy of
sector winners. An abstract about winners off the business feeds. The
arguement is presented - prior winners are statistically within some
greater certainty apt to continue outperforming prior losers; then
again, there's an older adagio (disambiguation) - 'there are liars,
damn liars, and, then, there are the statisticians.'

> The dollar seemed to reach a minimum against the Euro in Jan 2005 and
> has generally risen since then so buying foreign stocks in the USA may
> no longer be a good idea. As always with stock markets one knows what
> one should have invested in but not what one should do next. :-)
>
> Getting away from Index funds and all-stock indices, Merril Lynch Latin
> American fund has made an annualised 61% in each of the last 3 years in
> USD showing the benefits of sector funds, if you can guess right or
> latch on to the winners.

Re: Dumping US stocks, so what %repositioning?

Flasherly wrote:
> East Europe is most consistantly at parity within an immediacy of
> sector winners. An abstract about winners off the business feeds. The
> arguement is presented - prior winners are statistically within some
> greater certainty apt to continue outperforming prior losers; then
> again, there's an older adagio (disambiguation) - 'there are liars,
> damn liars, and, then, there are the statisticians.'
>
>
>>The dollar seemed to reach a minimum against the Euro in Jan 2005 and
>>has generally risen since then so buying foreign stocks in the USA may
>>no longer be a good idea. As always with stock markets one knows what
>>one should have invested in but not what one should do next. :-)
>>
>>Getting away from Index funds and all-stock indices, Merril Lynch Latin
>>American fund has made an annualised 61% in each of the last 3 years in
>>USD showing the benefits of sector funds, if you can guess right or
>>latch on to the winners.
>
>
Where did you get this unique literary style from, Flashman? Were you
frightened by a Thesaurus when young? :-)

Re: Dumping US stocks, so what %repositioning?

David Wilkinson wrote:
> > East Europe is most consistantly at parity within an immediacy of
> > sector winners.
> >
> >>The dollar seemed to reach a minimum against the Euro in Jan 2005 and
> >>has generally risen since then so buying foreign stocks in the USA may
> >>no longer be a good idea. As always with stock markets one knows what
> >>one should have invested in but not what one should do next. :-)
> >
> Where did you get this unique literary style from, Flashman? Were you
> frightened by a Thesaurus when young? :-)

Trade deficits and interest rates are a concern, as is outsourcing.
Measures of domestic issues, which do reach farther when applied to a
multinational U.S. presence, up 26% over last year at 40% profit
growth*, through global consignment; as a profit motif that is,
nevertheless, expected to continue for so long as an unexpected
paradigm shift forms, within a symbiosis of "shock-susceptible" models,
and remains, unaffectedly so, a germane international coalescence of
countries that continue to exist as reasonable extensions of capital
venture. Buy foreign: where national, indeed, your patriotic interests
are in alliance to companies producing, from afar, may be what best
behooves God and country; even though, most certainly, it does seem a
strange application of classic economic theory; all but for foreign
labor incentives, be what they may, for howsoever long, and all damned,
lowly wage-earners.

*archives.econ.utah.edu/archives/marxism/2005w14/msg00014.ht m

Re: Dumping US stocks, so what %repositioning?

Proteus wrote:

> On Sun, 02 Oct 2005 22:23:31 +0000, MichaelC wrote:
>
>>>Warrent Buffet, in 2003 for the first time in his life, began
>>>buying foreign currencies-- to the tune of $12 billion by year end; he
>>>cited continuing weakness of the US dollar as his reason. Bu 2005
>>>Buffet's foreign holdings increased to $20 billion.
>>
>>And, to be fair, one must note that up to this time, he's lost some hundreds
>>of millions of dollars on this strategy.
>>
>>
>
>
> I am not sure what he invested in, but yesterday I was looking at mutual
> funds in europe, emerging europe, latin america, precious metals, energy,
> and 90% of them did 30%+ returns each year on average for the past several
> years. That, coupled with rising price of gold and stagnant blue chips,
> tells me something is afoot. What am I missing?

What you're missing, is that a weak dollar is actually a boost to the
U.S. economy (and hence to the stock market). As long as price
inflation doesn't soar, a weak dollar makes U.S. goods, services and
workers more competitive in the global economy (and conversely for a
strong dollar).

Example: Japan in the 1990's. The yen was very strong, and the price
of gold as measured in yen fell sharply. But that wasn't good news for
Japan. Rather, it was a measure of Japan's deflationary depression, and
their stock market remained in the doldrums.

As it turns out, I'm bearish on the U.S. stock market too. But not for
the reason you are.

Another thing you're missing, is that times change.

It is true that in 2000-2002, the U.S. stock market was in a severe bear
market that took the S&P 500 down nearly 50%. But that's over and done
with. OTOH, energy stocks soared over the last few years, but that may
be over and done with soon too.

You need to guard against jumping out of a market when it's about to do
well and jumping into a market when it's about to turn down. Remember,
you want to buy into a market because you think it *will* do well, not
*after* it's already been doing well for years.

Because times change.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: Dumping US stocks, so what %repositioning?

Proteus wrote:

> On Sun, 02 Oct 2005 16:58:31 -0400, Ed wrote:
> ..
>
>>No, and the blanket statement that all other stock markets get ebola is also
>>false.
>>Be careful what you believe, only some of it is true.
>
>
> I do objectively notice that while the us market has remained relatively
> flat for years now, foreign markets and gold have risen, substantially.
> Same (risen) for energy and precious metal stocks. Almost across the board.

Which sounds to me like the big profits in those markets have already
been made and now it may be too late to invest in those markets.

Natural resource stocks (including gold) have risen substantially, but
it has nothing to do with the U.S. economy "getting a cold." Rather, it
has to do with the rapid industrialization of China and other emerging
markets. They need raw materials of every type to build infrastructure,
buildings, industries, etc.

But these foreign economies have risen so far so fast that some sort of
correction or mild recession is virtually inevitable. Don't make the
mistake of buying in just before that hits.



--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.