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  1. #61
    Ancient Mariner HKG2301's Avatar
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    Quote Originally Posted by blackcap View Post
    I do remember vividly. I was a dealer at the time. Interest rates on deposits were in the order of 7-8% as well. Huge difference with now. Try putting a WACC of 12% in a DCF as opposed to 5%. Makes the wold of difference.

    But I too am looking at all this unfolding with bewilderment.
    It's like watching a slow-motion train wreck. I can't take my eyes off it.

    We're very cash-heavy (a good place to be, at the mo') and ready to snap up some good deals when the market returns to realistic levels. Not jumping back in just yet though...


  2. #62
    Senior Member Entrep's Avatar
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    2020-05-11 13.03.14.jpg

    last time we saw this was pre-GFC

  3. #63
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    Quote Originally Posted by HKG2301 View Post

    So my concern is, how will all this effect the NZ markets? Both NZX and property? To what extend will the biggest global crash in history infect ('scuse the pun) our small corner of the world?
    the way we're going not as much as others , BUT still quite a bit overall.

    Quote Originally Posted by HKG2301 View Post

    We're very cash-heavy (a good place to be, at the mo') and ready to snap up some good deals when the market returns to realistic levels. Not jumping back in just yet though...

    I'm less cash percentage wise than I was before COVID. ultimately value is a lot better down here than up there , even if its not as cheap as we want , and its still quite selective.
    For that reason I'm prepared to take more risk than I was before. Not sayin hock the farm at all of course. But prepared to put more in than I take out, quite distinct from earlier.
    For clarity, nothing I say is advice....

  4. #64
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    Quote Originally Posted by SBQ View Post
    ...And this is while OTHER nations around the world were competing against the US - ie the EU model, is failing...
    The USA came together in 1789 as former British colonies with a common legal system, culture and language.
    THE EU/EEC started in 1957 as group of nations with a diverse range of languages and cultures.

    There has been a co-operative international system including bodies such as the IMF, OECD, WTO which allowed the USA to prosper by co-operatively trading and investing around the World. It was not the USA versus the World - until Trump came along.

    The UK joined the EEC in 1973. Until it left in 2016 its GDP per person in USD terms increased by a factor of 13. Since it left the EU (2016-19) ts USD GDP per person has fallen.

    Between 1973-2016 The USA GDP per person in USD terms only increased by a factor of 10.7.

    Please explain why you think the EU is failing in comparison to the USA.

    Figures from https://countryeconomy.com
    Last edited by Bjauck; 13-05-2020 at 08:30 AM.

  5. #65
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    Quote Originally Posted by Bjauck View Post
    The USA came together in 1789 as former British colonies with a common legal system, culture and language.
    THE EU/EEC started in 1957 as group of nations with a diverse range of languages and cultures.

    There has been a co-operative international system including bodies such as the IMF, OECD, WTO which allowed the USA to prosper by co-operatively trading and investing around the World. It was not the USA versus the World - until Trump came along.

    The UK joined the EEC in 1973. Until it left in 2016 its GDP per person in USD terms increased by a factor of 13. Since it left the EU (2016-19) ts USD GDP per person has fallen.

    Between 1973-2016 The USA GDP per person in USD terms only increased by a factor of 10.7.

    Please explain why you think the EU is failing in comparison to the USA.

    Figures from https://countryeconomy.com
    For as long as I can remember, it's always been "The US" vs the world, well before Trump made this observation. I've heard the most moronic excuses locally here in NZ about why there's been bias against Americans? One being, during war times, Americans were known to come and impregnate our women. This view would be synonymous over in Europe as many tourists i've met from those regions have a similar view. Over the years living in NZ, I put it down to simple jealousy, and certainly not recent issues like Trump is voicing this out. I even recall watching 80s movies where Americans were portrayed negatively in the rest of the world (in pop culture) ; this is nothing new.

    Some reading: https://foreignpolicy.com/2018/07/10...the-same-time/

    Now for some hard figures:

    https://tradingeconomics.com/europea...per-capita-ppp $38K
    https://tradingeconomics.com/united-...per-capita-ppp $55K

    During my last year at uni we did a study on the European Union model. We also debated on the issues & roles of the UN, NATO, WTO, etc. Perhaps the best years of my study because a lot of it had little to do with text book studies and more with real world issues. This was in 1997 before the EU currency was about to be floated. For the UN, the conclusion we based was it was a 'useless' organisation. Some 20 years later and they still prove to be useless against global conflicts.. yet we criticized why the US continued to fund most of the UN's budget. Took until 2016 when Trump came in for the US gov't to realise this problem. and we look at issues like the WTO and NATO - again all organisations with their shortfalls. Canada for years has lodged complaints with the WTO against the US but somehow, the WTO can't impose binding laws against the US. Wow! is this not a surprise?

    But for the most compelling issue is the formation of the EU. What was it's motive, it's role? why? We came down again, to the simple conclusion. They wanted to adopt a model that the USA has used for the past 200+ years. A "Unification of States". Yet we saw so many shortfalls. Europe has a diverse mix of cultures and languages, many that maintain conflicts that had gone for generations. You have a huge gap between the haves and the have not nations within Europe. Then there's sovereign debt issues that never was marked by the ECB - that is, the EU nations never 'consolidated their debt' - you have Italy that claims debt from Germany over the war years. The US had sorted their debt consolidation centuries ago. Martin Armstrong talks a lot about the EU monetary problems and debt financing on various member states:

    "There is no real EU unity behind the curtain which is when the debt was NEVER consolidated from day one. They wanted a single currency, but not a single responsibility for the debt."
    https://www.armstrongeconomics.com/i...tion-of-debts/

    and from a 3rd reporting of Mr. Martin:

    https://snbchf.com/2017/02/martin-ar...isintegration/

    "Every nation including the United States should consider the success of Switzerland and its small government. They provide the ideal example of democracy in action and how to rid society of bureaucratic corruption."

    Switzerland is not part of the EU and seems to be holding well. (helps to have all that money as a once tax free haven nation). But to have greater nations like UK to pull the lion share and propping up poor EU nations is not going to work in the long term. Germany being the largest economy is getting the short end of the stick by being part of the EU.

    A lot more can be discussed about the issues of the EU - but from what the EU model was intentionally meant to do... we're witnessing the model falling apart.

  6. #66
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    Quote Originally Posted by SBQ View Post
    ... A lot more can be discussed about the issues of the EU - but from what the EU model was intentionally meant to do... we're witnessing the model falling apart.
    Can't argue that. But sadly the US seems no better these days, at least with Trump at the helm.

    Hopefully things will improve in November because now, more than ever, the US and the world needs a safe pair of hands at the helm.

    The coincidence of political, social and even military unrest in so many parts of the world was worrying before the pandemic, much of it exacerbated by Trump's mischief. Now it's positively scary!

  7. #67
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    Quote Originally Posted by HKG2301 View Post
    Can't argue that. But sadly the US seems no better these days, at least with Trump at the helm.

    Hopefully things will improve in November because now, more than ever, the US and the world needs a safe pair of hands at the helm.

    The coincidence of political, social and even military unrest in so many parts of the world was worrying before the pandemic, much of it exacerbated by Trump's mischief. Now it's positively scary!
    IMO the US has done well. From an investment point of view the DOW was under 18K when Trump came in, now even after the crash the DOW is around 23K, so it's $ better invested than sitting in the bank. Could it be argued under Democrat rule the stock market would of gone higher? -very unlikely without Trump's corporate tax cut.

    There is a real political divide in the US and that's shown in the people. But if you look closely what they're fighting over amounts to very little over the direction where the US is heading. As I mentioned before, the US maintains the attraction of skilled migrants which fuel's the nation's 'Secret Sauce'. Have a look at history what the US has done in liberating Japan after WWII and S Korea in the Korean war? They didn't have to misbehave or steal in a certain way that we've seen China done in the past 20 years.

    Have a look at main street in America. What do Americans really feel about China? Don't follow the media as they have their own agenda and instead, have a talk at the people living there. What they tell me is they've had enough with 'globalist' views which disadvantages everyone. Issues like Climate Change doesn't seem to fit well as no gov't seems to have a viable answer. I get replies like "Since when Carbon Tax has been able to change the climate?... gov't collect that money and then where does it go? Will all that $ go towards renewable energy and if so ; WILL IT make a difference?" That's never been how the Americans solve problems by relying on gov'ts to fix things. One thing certain, America is all about making deals and if the rest of the world is taking advantage, then sooner or later things will change. It's this change that is causing the divide between the US vs the Rest of the World or more specifically, China. Canada & Mexico had NAFTA and after some 30 years, it turned out only Canada & Mexico had the benefit; after repeated issues from softwood lumber disputes, Canada's GST, etc. made NAFTA unfavourable for Americans. No past presidents would push that issue.. until Trump came along with the USMCA. Now, let's see what will happen with China. It may be that China will never get a trade deal and the Americans will just carry on. Certainly the problem with China is they depend on exports. They are a nations of exports. If the trends shows that western corporations pull out of China because their products attract tariffs in their home markets, then what would China have left to go? No one questioned how China's rise came at the benefit of US trade.

    Sooner or later, nations around the world will need to show their cards. Canada sides with America just like NZ does with Australia. If China's ways do not change, then does everyone accept this as the norm? That's why we have musicians such as Bryan Adams implying about China's habit of bat eating, wet market culture. Though his recent apology was made, it will not change the fact that Western views are... the Chinese have a long reputation of being devious, uncivilized, cheating, etc. I would expect more of this activity for Xi Ping Pong's China 2025 Global Feat goal.

    The real question is, will Americans continue to buy Made in China? I do believe NZ should not be so reliant on trade with China. How did we lose our Kiwi ingenuity?

  8. #68
    Ancient Mariner HKG2301's Avatar
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    Quote Originally Posted by SBQ View Post
    IMO the US has done well...
    I get that you subscribe to the idea of American Exceptionalism but, even if historically true (for one brief shining moment), isn't that a bit of a stretch in Trump World? Traditional Republican fiscal conservatism has gone out the window, to be replaced by corporate socialism. Media-manipulation, paranoia and hyper-partisanship have split the country down the middle. Citizens United, superpacs and the lobby system have replaced true democracy. MAGA populism and the military-industrial complex have replaced global leadership.

    But I'd rather not get into that here.

    Instead, I'm trying to get a feel for how much the impending US depression will affect our markets here, given we've (hopefully) got a reasonable grasp on Covid-19, while the States most certainly hasn't. Maybe simplest to phrase the question in terms of IF-THEN...

    IF the US markets are not experiencing a V-bottom, but simply a bear market rally, leading inevitably to a re-test of the March lows,

    THEN
    will the NZX inevitably get dragged down when the US tumbles, regardless of our quite different situations as regards Covid?

    I've traded the US markets for decades and am reasonably confident of my read there, but I'm new to the NZ market so grateful for any insight into how rigidly one follows t'other.

  9. #69
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    Quote Originally Posted by HKG2301 View Post
    I get that you subscribe to the idea of American Exceptionalism but, even if historically true (for one brief shining moment), isn't that a bit of a stretch in Trump World? Traditional Republican fiscal conservatism has gone out the window, to be replaced by corporate socialism. Media-manipulation, paranoia and hyper-partisanship have split the country down the middle. Citizens United, superpacs and the lobby system have replaced true democracy. MAGA populism and the military-industrial complex have replaced global leadership.

    But I'd rather not get into that here.

    Instead, I'm trying to get a feel for how much the impending US depression will affect our markets here, given we've (hopefully) got a reasonable grasp on Covid-19, while the States most certainly hasn't. Maybe simplest to phrase the question in terms of IF-THEN...

    IF the US markets are not experiencing a V-bottom, but simply a bear market rally, leading inevitably to a re-test of the March lows,

    THEN
    will the NZX inevitably get dragged down when the US tumbles, regardless of our quite different situations as regards Covid?

    I've traded the US markets for decades and am reasonably confident of my read there, but I'm new to the NZ market so grateful for any insight into how rigidly one follows t'other.
    Doesn't matter how the US is handing the COVID. The people there want their freedom back at the cost of lives. The productive part of society wants to work. The unproductive (for most part), the elderly, sick, obese, etc? will have to deal with the virus. Corporate US was never designed to be stopped or quarantined; that's not how America came to rise. They're a nation of making deals and they've certainly worked out the collateral damage by restarting the economy.

    I've been invested in the US equities since I left Canada to NZ some 25+ years ago. My close analysis of the NZX is a scam. Everything from how you buy shares to how the NZX manipulates the bid / ask pricing schemes.. to the NZ brokers that cream commissions and account managements fees. To the silly emphasis of shareholders wanting dividends over tax free capital gains. It's nothing part of the finance studies I learned back in Canada or in the US. The only thing.. and ONLY thing that is keeping listed NZ companies a float on the NZX is the way our tax laws are biased towards NZ equities than foreign equities (ie. FIF on foreign share investments).

    How will foreign markets affect NZ? I would be more concerned on the NZD currency as this has a direct impact on people's standard of living. You have less.. consume less.. live less.. with a weaker NZD to the USD. Another factor is NZ is a highly regulated country - when the businesses close up - new ones don't spring up. But in the US? The people there like to take risks and they will do so if the gov't steps away (removing regulations). Have a look at every aspect of NZ's industry in terms of regulation. Building, health care, ACC, vehicle ownership WOF, none that represents a competitive advantage to doing business abroad. Remember we have a gov't that does not care about businesses and has a history of implementing more and more regulations. (recently the NZ FMA making it illegal for foreign brokers to serve to NZ residents if they're not licensed by the FMA).

    If you have children... consider that NZ is not the be all end all place to make it happen. There's good reason why so many Kiwis have left NZ and thought of coming back but could not do so or.. simply preferred the lifestyle abroad.

  10. #70
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    Quote Originally Posted by SBQ View Post
    How will foreign markets affect NZ? I would be more concerned on the NZD currency as this has a direct impact on people's standard of living. You have less.. consume less.. live less.. with a weaker NZD to the USD. Another factor is NZ is a highly regulated country - when the businesses close up - new ones don't spring up. But in the US? The people there like to take risks and they will do so if the gov't steps away (removing regulations). Have a look at every aspect of NZ's industry in terms of regulation. Building, health care, ACC, vehicle ownership WOF, none that represents a competitive advantage to doing business abroad. Remember we have a gov't that does not care about businesses and has a history of implementing more and more regulations. (recently the NZ FMA making it illegal for foreign brokers to serve to NZ residents if they're not licensed by the FMA).
    One word.. patent law. Thankfully we don't have this here. Also no culture of litigation for every minor issue.

  11. #71
    Ancient Mariner HKG2301's Avatar
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    Yet I can't help thinking, this is the place I'd rather be...


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    Quote Originally Posted by Panda-NZ- View Post
    One word.. patent law. Thankfully we don't have this here. Also no culture of litigation for every minor issue.
    From an engineering perspective, patents are meaningless in a world where everyone steals. NZ generally follows international patent laws just so the west follows any NZ patents. But for China, is it OK for a company like Huawei to steal IP and sell it to us? Plenty of cheap stuff on Alibaba of questionable tech sources.

    Have many friends living in the US, none of them feel threatened by being sued or doing something minor. I do believe gov't regulations gives less back in public good than if done by the private sector. A clear example where I grew up, BC, Canada the auto insurance authority is ICBC (wholly gov't owned and operated). Next door is Alberta which the province operates entirely privately run insurance where they leave people to sue. Residents of BC have always paid excessively more on auto insurance than Alberta and claimants received less in BC from auto injuries than the latter. Similar examples can be seen in telephone, utilities, etc. (I believe in NZ telephone is a clear example of where gov't state owned could not pass on the benefit to the consumers where the private operates could).

  13. #73
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    Quote Originally Posted by Bjauck View Post
    The USA came together in 1789 as former British colonies with a common legal system, culture and language.
    THE EU/EEC started in 1957 as group of nations with a diverse range of languages and cultures.

    There has been a co-operative international system including bodies such as the IMF, OECD, WTO which allowed the USA to prosper by co-operatively trading and investing around the World. It was not the USA versus the World - until Trump came along.

    The UK joined the EEC in 1973. Until it left in 2016 its GDP per person in USD terms increased by a factor of 13. Since it left the EU (2016-19) ts USD GDP per person has fallen.

    Between 1973-2016 The USA GDP per person in USD terms only increased by a factor of 10.7.

    Please explain why you think the EU is failing in comparison to the USA.

    Figures from https://countryeconomy.com
    When i look at the UK GDP Growth rate all i see is lower highs and lower lows..the trajectory has been down since the 70s ?

    https://tradingeconomics.com/united-...-growth-annual

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