The stock market went up over 2,000,000%... about 66%/yr compounded in Turkey, 1982-2005, For those "lucky" enough to have been fully invested for the entire ride (and not accounting for taxes)... they STILL LOST 98% OF THEIR BUYING POWER IN THE DEVALUATION. Just before the devaluation in 2005, a cup of cafe coffee cost 3,000,000 Turkish Lira. After the devaluation, a cup of coffee cost 3 New Lira... the devaluation was 1,000,000:1, lopping off 6 zeros. If the stock market goes up that much, inflation/currency destruction will destroy buying power. Recalled from memory... look it up if you find this astonishing. The stock markets increased 400% in Zimbabwe but the people of Zimbabwe were starving. From ZeroHedge, 10/22/2008: "While markets across the world have been crashing, the Zimbabwe Stock Exchange has being seeing record gains as citizens turn to equities to protect their money from the country's hyperinflation. The DOW Could Fall 6,000 Points. Governments gone mad http://www.businessinsider.com/howard-davidowitz-dollar-crisis-dow-6000
So what's the moral of the story? Is there some sort of trade you recommend we implement, in order to take advantage of a market that is rising in nominal terms, but losing value (along with the currency) in real terms? Would borrowing short, and investing into the market hedge out the currency devaluation? Was long-term borrowing (ie: at a fixed rate) available during the Turkish episode you talk about? Did 'hard money' sectors (mining, oil and gas) significantly outperform the other sectors during this extremely strong market performance? How well did other asset classes perform?
World GDP is $70 Trillion every year. So Forex capital is also $70 Trillion every year. Everyday food and other products and services everybody buys is basically Forex because forex means currency trading. Forex transactions are estimated 1,100 Trillion every year or $4 Trillion per day. Who Creates Billionaires? Stocks Or Forex Example, if Microsoft shares are worth $25 each today so Bill gates is worth $50 billion. After 1 month microsoft shares are worth $33 because millions of new investors purchased/invested microsoft shares. So now Bill gates will be worth $60 billion (estimated). To my understanding owners of stock exchange listed companies have/own 50% shares of their company. Now consider Forex trading..... I think EUR/USD transactions are $1 Trillion per day. If majority of forex traders think today Euro is strong they will buy/invest Euro and when they close the deal, they earn profits. Estimated $500 billion will be traded in Euro per day but here no billionaires are created. Forex traders share the profits. I think the value of US dollar and Euro also does not change because of daily forex transactions. But in stock markets a investor will invest $10,000 and when the shares increase 50%, he earn $15,000. But the company owner earns $500 million or $1 Billion because millions of investors have purchased the shares of his company. So who creates billionaires, Stocks or Forex? If the stock market goes up that much, inflation/currency destruction will destroy buying power. In Turkey, 1982-2005, the stock market went up over 2,000,000%... about 66%/yr compounded. For those "lucky" enough to have been fully invested for the entire ride (and not accounting for taxes)... they still lost 98% of their buying power in the devaluation. Just before the devaluation in 2005, a cup of cafe coffee cost 3,000,000 Turkish Lira. After the devaluation, a cup of coffee cost 3 New Lira... the devaluation was 1,000,000:1, lopping off 6 zeros. My point is that average people say billionaires have $50 billion or $70 billion. But owners of stock companies start their business and get it listed on the stock exchange and they get busy with their daily business. Then millions of small investors purchase shares of the company and after 8 to 10 years, the owners have $30 billion or $50 billion whereas individual investors have $10,000 or $100,000 or $1 million or $1 billion. But in forex trading only the forex traders earn money and profit even when forex transactions are $ 4 Trillion per day or $1,100 Trillion per year. No billionaires are created from other people's investment for 4 or 5 years in forex. If some forex traders has long-term profitable forex trading system they can become billionaires for forex trading. So millions of investors create few billionaires in stocks and they say there are 1000 or 2000 billionaires only. In forex trading, everybody earns big money from indvidual successful trading. Nobody helps anybody in becoming billionaires The value of a currency is arrived/detetmined by the business and trade performance between 2 countries. I agree, daily forex transactions also changes international currencies price/value because the price change every second or every minute. Yes, but by whom does this value get determined? By investors, one time they seek risk, one time they are risk averse. For example, if investors are seeking risk and see that the australian economy is just booming, they will convert their cash into australian dollar to be able to buy stocks in that economy and participate in the economic boom. These conversions determine the currency value more than anything else, and they are called money inflows and outflows. So, in the end, it's still the investors who push the currency market. In forex trading, the whole country/nation benefits because the currency value has reached new levels from many years of business and trade performance and investments. But in stocks only few billionaires have $40 Billion to $70 Billion from many years of investors investment. I am saying that in stocks, millions of investors create monsters and they say "who created the monsters". I mean, in stocks, millions of investors create few billionaires and they say "who created billionaires". The same can be said for Real estates also. No monsters are created in forex trading. The whole country/nation benefits and profits are from individual successful trading performance. George Soros, who became a billionaire due to currency speculation. And I explained you the reasons why also, if you invest in a currency, millions of investors are pushing the market (money in- and outflows). Don't know what more you need? And what about all the hedge fund managers that were involved in the carry trade. Most of them get hundreds of millions or billions in bonuses, due to their performance in the markets. And by the way, as I said before, you can't compare people who build companies with currency investing. You have to compare stock investing with currency investing. If you wanna compare building companies with something, then it might be with oil. The ones who have it are dependent on the millions of speculators, consumers & investors who need oil for whatever reasons. Only due to them did the people in control get filthy rich with billions of dollars lying around at home. Take a look at some hedge funds & you will find a mixture of stock & forex traded along with other products, so to answer that question may be somewhat hard. From reading the Market Wizards I remember one trader that specialized in trading currencies only. The name Bill Lipschutz might offer some clue. I am sure there are others, but he is just one that I recall. If I am correct forex deals are closed everyday or after few days and profits taken. Whereas in stocks the investment continues for 10 or 30 years and a $10 stock reachs $300 to $400. The same applies to other investments also. The company owners should raise/collect money from investors from IPO but they should not list the company on stock exchange. Example, if company owner needs $5 billion they should launch an IPO and collect $5 billion for their company and continue their business but the share should not be listed on stock exchange. Company owners should pay dividends only to his shareholders. Owners should earn money from hard earned and slow profits and not fast rise in share value. Shares should be similar to bank loans and company owners have to pay dividend otherwise they will be penalised. When the company is listed on stock exchange, the owners get away with the excuse that shareholders can earn extremely high profits from stock exchange so dividends are not guaranteed. When company owners collect $10 billion or $20 billion from IPO they do not guarantee any profits as security whereas bank loans needs security and interest guarantee. Surprising, Trillions of dollars are collected without any security and guarantee and when people lose money they start crying. I never understood the concept of stock exchange shares trading.
When there is less sales and less profits for stock exchange listed companies, the share price fall and there is no dividend. But Forex trading has nothing to do with profits or loss of companies since forex in competition between international currencies such as USD/EUR, USD/GBP, EUR/GBP etc.. Currency value increase or decrease with the performance of the business and trade of the country. Investors buy shares or stocks and they sell it after 3 or 10 years which is termed as long term investment. But there is no guarantee that there will be profits in long term because inflation, purchasing power and company sales and profits determine the profits for long term investment. But forex trading is daily trading only. Profits and losses are booked everyday. Forex trading deals may extend to 2 or 4 days but not more than this. When there is serious debts problems worldwide then daily trading is the best because there is no guarantee companies will be profitable in long run. Devaluation of currency is serious risk in coming years. There is no long term investment in forex such as 1 year or 10 years. Reply from most reputed source in Forex: "I am a little confused about the standing of information of many people regarding Forex products.....of course an investor can hold such a position as long as he likes despite that such a position needs a certain margin. Furthermore there is a daily interest, which is more often positive as negative" Most important is that forex trading is not dependent on company profits. There is always farming and fishing which will always be profitable. Farming and fishing revenue is included in Forex. The whole country's business and trade performance determines the currency value and then the currency competes with other international currencies in forex trading.
How many business and factories have job cuts or shut down from losses? Business is basically gambling. Estimating or predicting future profits and sales is basically gambling. Example: Blackberry (RIM) Cutting 2,000 Jobs NEW YORK (AP) â BlackBerry maker Research In Motion Ltd. is cutting 2,000 jobs as part of a cost savings plan announced last month and is shuffling some senior executives. The job cuts amount to about 10 percent of the company's work force. The company said Monday it will notify affected employees this week. It expects to give more information on the layoffs when it reports fiscal second-quarter results on Sept. 15. Its U.S. shares fell 41 cents, or 1.5 percent, to $27.50 in premarket trading. Waterloo, Ontario-based RIM has been hurt by product delays and competition from Apple Inc.'s iPhone and smartphones that run Google Inc.'s Android operating system. Although its Blackberrys have dominated the corporate smartphone market, RIM has not been able to translate this success to the broader consumer market, where the iPhone and Android phones reign. The launch of its PlayBook tablet computer, meanwhile, wasn't as successful as the company had hoped. RIM reported a 10 percent drop in its fiscal first-quarter earnings in June and gave an outlook for the year that was well below what analysts had expected. Also Monday, RIM said it is naming two executives to take on different parts of the chief operating officer role. COO Don Morrison went on medical leave in June. Thorsten Heins is being named chief operating officer, product and sales. Jim Rowan will become COO, operations. Morrison is retiring after more than 10 years with the company.
Bearice, stop your bullshit spew. The SNR is bad enough in these channels before you added random press releases and conjecture in a purported and fucking pathetic attempt at discussing the topic at hand.
Gold has returned average profit of +28% per annum past 10 years. I think world real estates have returned profit of 10% to 20% for past 50 to 60 years. Giant hedge funds pay profits of 10% to 30% in a year. I do not their profits for past 10 years.