Stock Attack II - A Complete Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Stock Attack II - A Complete Analysis

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Jerry Olson who wrote (38116)	7/19/2002 10:04:33 AM
From: Haim R. Branisteanu	Read Replies (2) of 52237

Hi OJ, I think that it may be time to start to be mildly bullish on certain US stocks and bearish on certain European stocks. Best strategy is to go by instruments which represent basket of stocks. ...... the logic behind that is quite simple and it is the USD. Today the prevalent approach is to shun US stocks due to the fall of the USD. This logic worked fine for the last 30% or so percent since March, but not any more IMHO. The reason ? Due the low USD around 25% since March US products are substantially cheaper and even at steady prices the profit margins are not under pressure due to the lower USD. On the other hand European manufacturers whose prices are quote in USD - e.g. memory chips for example will be killed due to the higher EUR. Assuming that at least 10% to 15% of Europe exports are in USD denominated prices or sold to US linked economies, EZ manufacturers are getting hit by (25% x 15% = ) 3.75% to the bottom line, not to mention loosing market share of around same amount to US or USD linked competition. The net result IMHO will be a drop of around 25% to 35% in EZ manufacturing companies earnings compared to around the same amount of 10% to 20% increase of US manufacturers earning. For many EZ companies this will be translated in outright losses The anticipated earnings spread is around 35% to 45% and possible more ..... a quite compelling reason to enter and arbitrage trade. At the time the herd will start to take notice by October this year it will only amplify the divergence's in stock prices. That is also the reason IMHO that the NAZ for example is not correlated to the DJIA in the down draft. Have not decided which play is better but aside from high tech pharmaceutical and basic industries may make sense, as is BA and DE, DOW, DD, CAT. Must see which EZ basket of stocks may be an attractive short.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next