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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ditchdigger who wrote (5256)	5/26/1998 5:52:00 PM
From: Sergio H	Read Replies (3) \| Respond to of 29382

The Germans are very happy to be getting Chrysler. They're tired of driving Beamers and Audis and Mercedez Benz. I agree with you about tomorrow in Europe DD. They do tend to follow our market. Take a look at NWSW. Looks like the employee revolution is becoming realitly. What price will they bid? Sergio

To: Ditchdigger who wrote (5256)	5/26/1998 6:19:00 PM
From: Sal D	Read Replies (1) \| Respond to of 29382

Ditchdigger I don't know if this will help at all and these numbers are from the period 1990 to 1995 I cant find any recent comparisons, to see if and how they changed. Of all the global markets, Canada and the United Kingdom have the highest correlation to the American market. During the period 1990 to 1995, Britain had the highest correlation to the United States(.65) and Canada the next highest(.57). Other countries or regions with high correlations to the United States were the Netherlands, Belgium, and Norway, these markets usually move in sync with the U.S. market. Foreign countries or regions that show historically low correlation to the U.S. market during the same time period were Italy(.16), South Korea(.20), Indonesia(.22), Chile(.24), Brazil(.26), Argentina(.27), Japan(.27), and Mexico(.29). The only global market to achieve a negative correlation to the United States over that period was the South African Gold market(-.18). One of the complicating factors when investing overseas is the problem of foreign exchange values. Generally speaking, a strong dollar would seem to discourage foreign investing since profits gained in foreign markets are reduced by the losses in there respective foreign currencies. To compensate for currency problems, many mutual funds hedge their dollar positions in a attempt to neutralize the effects of fluctuating exchange rates. Consider, however, that some foreign markets benefit when their currency is falling relative to the U.S. dollar. In the second half of 1995 there was a concerted effort to prop up the U.S. dollar, especially against the German mark. The attempt was successful, and the dollar rallied sharply(during that same time the German mark was falling but German Stocks (DAX) were on the rise). The German market started to rally and became one of the better performing global markets. While it's true that some of the profits made in those markets were lost in the currency conversion, it is also true that the rising dollar was a major factor in those stock market gains. Good Luck.