# US assets getting cheap



## joe sod (7 Nov 2007)

With the dollar falling so much, US assets are now getting very cheap for foreigners, for the last few years money has been flowing out of the dollar and its value has fallen this has made foreigners reluctant to hold onto US assets especially equities because the value of these assets in foreign currencies has been falling. However a stage has to be reached soon where these assets become so cheap that money has to flow back into US assets. It maybe a while yet maybe another year. What do others think


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## thomsk (7 Nov 2007)

I reckon it takes a bit of guesswork to try and figure out when the dollar will reach its low. When it was reaching the $2 to £1 level, many wondered if it would go any further. Now, cause of the sub-prime crisis, it continues with more banks revealing their exposure all the time.Will european countries start announcing the full extent of their sub-prime worries, and if so - when? I think it could well be up to another year away until the full picture is known.
So buying US assets is down to some guesswork and luck i guess(for now).


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## thomsk (7 Nov 2007)

I'd say that the chinese announcing today that they are "getting out" of many US assets ( I heard a figure of $1 trillion) may have some impact.


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## dunkamania (8 Nov 2007)

The Chinese official quoted has no authority over Chinese monetary policy,he is in fact a member of the opposition party(Chinese version of opposition party)

Dollar will continue to slide,not at current speeds though.Us assets not looking great at the moment.


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## tyoung (8 Nov 2007)

Generally agree with you, Joe. The dollar is way undervalued against the euro. Buying US stocks now is probably a good longterm move. But I also think Irish banks in particular are very cheap.


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## Markjbloggs (8 Nov 2007)

tyoung said:


> But I also think Irish banks in particular are very cheap.




Really ??  What is the growth driver for Irish banks over the next few years?


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## Guest120 (8 Nov 2007)

joe sod said:


> With the dollar falling so much, US assets are now getting *very cheap* for foreigners





tyoung said:


> But I also think Irish banks in particular are *very cheap*.



How do you define very? There _may_ be some value but to define it as very cheap is slightly amiss.


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## Sunny (8 Nov 2007)

Markjbloggs said:


> Really ?? What is the growth driver for Irish banks over the next few years?


 
Back to the good old days of overcharging customers????


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## Markjbloggs (8 Nov 2007)

Sunny said:


> Back to the good old days of overcharging customers????



You mean they've stopped ????


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## Sunny (8 Nov 2007)

Markjbloggs said:


> You mean they've stopped ????


 
I think it just stopped becoming such an important profit centre to banks as they made so much money out of 'legitimate' means!!


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## tyoung (8 Nov 2007)

Bluetonic
On a P/E basis and dividend yield Irish banks look reasonable. No doubt earnings can and probably will fall and dividends can be cut but I think there's a decent margin of safety. On a price to book ratio they don't look too bad either. IL and P's P/book vavue is 1.1.
 I don't think they have any direct exposure to the subprime mess. In fact I think the credit crisis may be a blessing in disguise for Irish banks. Because of the amount of floating debt around, the biggest risk is that the ECB would continue jacking up rates. If it hadn't been for the credit crisis I think the ECB would be at 5% today and promising higher rates ahead. As it is they are effectively on hold despite what they may say.
 The sellers in the main seem to be international investors who bought the  Irish economic miracle but now see parrallels with the US housing situation. I'm not a cheerleader for the Irish property market but I think any downturn is well priced into the banks' stocks.  Just my opinion.
If you haven't seen this it's a good laugh.
http://www.youtube.com/watch?v=SJ_qK4g6ntM
Regards


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## Brendan Burgess (8 Nov 2007)

Hi TYOung

That clip is brilliant. 

Brendan


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## Duke of Marmalade (8 Nov 2007)

Yep, really good fun.


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## Sunny (9 Nov 2007)

Brilliant!


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## Guest120 (9 Nov 2007)

tyoung said:


> http://www.youtube.com/watch?v=SJ_qK4g6ntM
> Regards


Excellent!


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## thomsk (9 Nov 2007)

True !  (video clip)


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## joe sod (29 Dec 2007)

I think US energy stocks are a great long term buy, china is going to invest alot of its dollars in US energy and US energy technology, Buffet has recently added  2 big US energy stocks to its portfolio, and these are in the public domain, also buffet seems to be investing more and more in oil and energy, also the US trade deficit is starting to fall as american exports are now cheap.


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## evan (2 Jan 2008)

i see the us market rose by 7% last year, but the iseq dropped by 30%, even with the fall in the dollar, its starting to look attractive


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## joe sod (15 Feb 2008)

Many commentators are now predicting that the dollar is set for a big rebound against the euro, the analysis is that the dollar actually rose against the euro following the severe rate cut by the FED, normally the opposite would be expected, the analysis is that after years of falling dollar against the euro that the dollar has bottomed, the cheap dollar has made US assets alot cheaper than european, also the arabs and chinese are about to load up on US assets, another important but ignored trend is that the US trade deficit is reducing dramatically, the cheap dollar has made american exports very competitive , also the euro maybe facing its first big test with the weaker economies struggling to remain within its limits


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## johnson32 (16 Feb 2008)

ok call a spad a spad!! it looks like that buying shares in the us is at least in the short to medium term a good thing! my question is how best to go about it and who to buy them through. US trading companies or are you better off sticking with davies, etc, etc.


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