Get Out Now!
By Tim Hanson
September 17, 2009 | Comments (52)
I've successfully scared the heck out of some of you with predictions of the
dollar's looming demise.
Yet I've not said it nearly as forcefully as Swiss banker Dr. Konrad Hummler.
Here's what he wrote in his recent Wegelin Investment Commentary: "It's time to
take advantage of the recovery of the U.S. dollar to get one's currency
diversification in order."
Read between the lines. He's telling you the dollar is going down . . . hard.
But don't just take my -- or Dr. Hummler's -- word for it
But we're not the only ones giving such advice. If you've been paying
attention, then you know that Warren Buffett came out against the dollar in an
August New York Times editorial.
And Hummler, in his commentary, points out two other investing luminaries who
have taken high-profile stands against the dollar:
* "Bill Gross of Pacific Investment Management Co. (PIMCO), which
manages the biggest bond fund in the world, advises investors to sell dollar
investments 'before the central banks and sovereign wealth funds do.'"
* "[C]ommodities specialist Jim Rogers . . . announces his new favorite
currency -- the Chinese yuan."
Now, you can heed these words of warning, or you can stick to your U.S.
investing guns. But allow me to suggest that the latter is an irrational
position.
After all, there's limited downside to diversifying into great companies that
do business outside of the United States. There is, however, significant
downside to investing in nothing but dollar-denominated investments.
It'd be crazy to stash your entire life's savings in one company. It's just as
crazy to stash your entire life's savings in one currency.
But there's opportunity in the meantime
Despite the dollar's precarious, debt-laden position, the currency is in a
pretty good place relative to other world currencies -- thanks to investors
having abandoned emerging markets for perceived financial safe havens during
the recent financial crisis.
In other words, should you opt to sell some of your dollar-denominated
investments (like U.S. stocks) and buy investments that are denominated in
Chinese yuan, Brazilian real, South African rand, and so on and so forth (like
foreign stocks), you have stronger purchasing power today than you'll likely
have in 6 or 12 months.
In other words, this is a temporary opportunity. But there's still time to take
advantage.
Have a look at this table
To make this simple, I've put together a quick chart of popular U.S.
investments and their foreign counterparts -- all of which are recommended by
Motley Fool Global Gains and which offer similar advantages with significantly
more foreign currency exposure.
If you own...
You should look at...
Altria (NYSE: MO) Philip Morris International (NYSE: PM)
AT&T (NYSE: T) or Verizon (NYSE: VZ) Telkom Indonesia (NYSE: TLK)
Devon Energy (NYSE: DVN) CNOOC (NYSE: CEO)
These are all solid companies with somewhat similar profiles -- because what
makes a good company outside of the United States isn't at all different from
what makes a good company inside the United States.
Altria and Philip Morris, for example, both sell a top-notch brand, pay a hefty
dividend, and generate significant recurring cash flows. Furthermore, because
foreign economies are smaller than the U.S. economy, you'll often find that in
a sector like telecom, you can find a company with far more market share than
anything you'd find in the U.S. (which is another good thing).
So, again, don't change your approach when you go searching for stocks abroad
-- simply change your purview.
At the end of the day, however, the most important point is that the stocks on
the right will make sure that your life's savings aren't 100% aligned with the
health of the dollar. Konrad Hummler, Warren Buffett, Bill Gross, Jim Rogers,
and I all think that's a very smart move.
Sufficiently freaked out?
If you're worried about the dollar, and you want more compelling international
investment opportunities, click here to join us at Global Gains with a free
30-day guest membership. You'll enjoy access to all of our premium research and
stock picks with no obligation to subscribe.
Already subscribe to Global Gains? Log in at the top of this page.
Tim Hanson is co-advisor of Motley Fool Global Gains. He owns shares of Philip
Morris International.. Philip Morris, Telkom Indonesia, and CNOOC are all
market-beating Motley Fool Global Gains recommendations. Telekom Indonesia is
also an Income Investor choice. Enter the Fool's disclosure policy.
Read/Post Comments (52) | Recommend This Article (163)
________________________________
From: Elaine Sui <elainesu...@gmail.com>
To: obrolan-bandar@yahoogroups.com
Sent: Friday, September 25, 2009 10:07:10 PM
Subject: Re: [ob] bumi?
Ehhhh.. did you say JUMP OUT? you're worried about the management
effectiveness, are you?
Elaine
2009/9/25 Bagus Putra Perdana <disclosure.inc@ gmail.com>
>
>
>Harga Indikatif Eksekusi tuh yang di 4000 Bos, Bukan Dijaminkan Seharga
>Segitu, Yg Berarti Baru akan di execute sama CIC kalo harga market BUMI atau
>Intrinsic Value nya ke Unleash 12 % diatas 4000. selama harga BUMI gak keatas
>4000 + 12 % ya CIC tetep santai karena beginipun udah dapet Coupon 12 % plus
>sweetener.
>
>CIC ini institusi resmi pemerintah cina. wajar dia maen ekstra aman, One WaY
>Or another 19 % Minimum IRR udah dikunci ama dia.yg kena sial ya existing
>shareholder. Jujur, cek berapa Operating CF BUMI skrg, Cek Berapa EBT BUMI
>skrg, Visualisasikan angka itu ke-kick 250 Juta USD untuk tambahan beban
>bunga. berapa angka sisa buat shareholders?
>
>Nice Figure Eh? Not That Good, Unless TopLine bisa Tumbuh untuk compensate
>angka 250 Juta USD yg kebuang untuk Beban Bunga tadi (yg kalo pake acuan
>operating margin optimis di 35-33% aja minimal BUMI harus tambah revenue
>tahunan 650-700 juta USD ato setara 8-9 Juta Ton Produksi di harga ASP Coal $
>75/Ton, berapa Tambahan Produksi Tahun ini?, berarti tahun ini dan depan akan
>ada cash-burn yg non-produktif sebesar 250 Juta USD.)
>
>Skenario 19 Trilyun full dikonversi hanya mungkin kalo BUMI bener2 bisa unlock
>value nya secara nyata.
>
>Kebanyakan Institutional Player sudah Skeptis sama BUMI. siapa yg mau angkat
>dan beli diatas 4000 kalo Kinerja Operasi BUMI belun ada improvement
>signifikan?.
>
>BUMI harus Unlock Value nya dengan peningkatan kinerja operasional, bukan
>dengan akrobat akuisisi.
>
>
>Manajemen BUMI tau itu, dan seharusnya menunjukkan itikad ke arah situ. 1.9
>Bio USD, digunakan untuk keputusan yg benar, surely Rp 4000 is only a wink,
>but spend it for another sloppy moves, jump out the boat mate. they
>(management) were drilling up their own Hull...
>
>2009/9/25 albert naga <albertnaga88@ yahoo.com>
>
>
>
>>diingat, bnbr dan bumi buy back saham bumi di harga 1700, dan sekarang
>>dijaminkan ke cic seharga 4000, berarti bnbr dan bumi akan untung berapa?,
>>untuk bnbr jelas akan menghapus kerugian yg 17 triliun itu, sedangkan untuk
>>bumi sendiri, hutang2 nya akan lunas semua, akan menjadi perusahaan nett
>>cash, setelah pinjaman dari cic di konversi menjadi saham, nah hitung aja
>>sendiri mau dilepas apa hold?
>>
>>
>
>
>--
>Each piece, or part, of the whole nature is always an approximation to the
>complete truth, or the complete truth so far as we know it. In fact,
>everything we know is only some kind of approximation, because we know that we
>do not know all the laws as yet. Therefore, things must be learned only to be
>unlearned again or, more likely, to be corrected... ....The test of all
>knowledge is experiment. Experiment is the sole judge of scientific “truth”. -
>Richard Feynman
>
>
>
