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Strategies & Market Trends : Value Investing

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To: Mr.Gogo who wrote (47900)	5/10/2012 7:40:41 PM
From: E_K_S	Read Replies (1) of 78744

Re: Currency: USD/JPY; EUR/USD Sony Corporation (SNE) -NYSE Potential hidden value in a strong $US and foreign companies that benefit from a strong $US I think the relevant observation for Japan (and one I am watching) is $USD/JPY. My premise is $USD will get stronger relative to the JPY, perhaps back to 100 (or higher) making items manufactured in Japan cheeper to US consumers. I am looking at investing in "Value" Japanese companies. I know Clownbuck watches these companies and may have a few names that would play into the stronger $US theme. As the $US gets stronger relative to the YEN, exports from Japan to the US become more attractive. However, European exports may fall as the EURO weakens as I believe eventually EUR/USD will reach parity. The wildcard for me is Canada. They have the strongest banks and IMO the least to worry about financial implosion (other than exposure to the EU). I expect $CAN to stay around parity with $US other than recently $3 billion worth of five year Yankee bonds — the first U.S.-dollar denominated offering by Canada since 2009 were issued. US Investors Flock to Canada's ‘Yankee’ Bonds These bonds must be paid back in $US. That could ultimately hurt Canada if/when their currency is impacted by a strong $US. A huge growing debt load by Canada w/ more FED QE could eventually see the $CAN cave in like the Euro. So, buying Canadian companies may be an eventual "Value Trap" if the currency parity relationship $CAN/$US changes substantially over the next 10 years. So for me, there is an investment theme here as money sloshes around the world and recently $US still seems like the currency of choice to own. My investment preference is to stay with US companies that manufacture and/or own $US domestic assets and/or sells product only to US buyers OR Foreign companies that sell product to US consumers w/ weak or falling currencies relative to $US. Japan is/will be one of these countries. What's your take? EKS

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