CurrencyShares British Pound Ster. Trst (AMEX:FXB)
Exch traded fund to reflect British Pound in USD
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One of many currencies I have recently made an underperform call on.
If a currency outperforms the s&p for an extended period of time with this little leverage, it will be the new "American dollar" from a new global powerhouse with the military, economic conditions, tax base, stability, and political will similar to the U.S. China is my vote for the future global safehouse, but I can't see global investors trusting their capital with a communist regime. The consensus seems to be that the dollar will be slowly replaced by a basket of stable currencies, and as such, the S&P should outperform these currencies in the long run.
--Wh1sp
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Continued national credit rating downgrades relative to other western nations will result in difficulty borrowing and higher interest rates, hindering long-term economic prospects.
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USD FXB FXE FXF FXC FXS FXM
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This is a one-star company within 10% of its 52-week high. It's gotta go down some time!
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US AND BRITISH CURRENCIES TIED TOGETHER. THE POUND IS ON THE DECLINE
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Excellent hedge against the dollar.
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While the $ is going down, the pound will go up.
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Dollar will continue to fall against major currencies. British interest rates are rising, hence monthly dividends become more attractive.
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no one better than this
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The world's supply of currency as a whole can only increase at the global level of inflation. The dollar has been beat up and taken through the mud though the dollar could struggle for years to come, I believe the contrarian play is the most prudent. With global securities and small caps outperforming large caps by a record level the last 6-7 years. I am finding most of the values in stocks that are part of the S&P. With real estate crashing, inflation looming it's head, and all-star emerging markets fund managers saying that it's getting harder to find REAL values, the S&P 500 may be the BEST way to play the upcoming bear market. *scratches head*... oddly enough. I believe that the S&P will outperform TIPS (a synthetic inflation fighter, vs. the natural inflation fighter the stock market).
For the last 8 years, investors have been working SOOOO hard to outperform 75% of the market (the S&P 500). This has been easy to do over the last 8 years simply by NOT investing in the S&P 500. Times are changing and as fewer and fewer people leave the large cap sandbox, the better opportunity there is for the biggest sandbox in the park. My prediction at the start of last year has already started coming true (the S&P 500 will be much more difficult to beat moving forward). I don't believe this is out of steam either. With a long term pick, the dollar could easily regain ground over the long run, in which case the relative value of other securities will naturally drop, making the relative value of the S&P 500 a massive winner. Fool on!!!
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Unless you've been living under a rock the past few years, you no doubt have heard plenty of reasons why the US dollar is sure to drop. However:
1) All the other people who aren't living under rocks have heard it too, so all the bearish arguments should already be factored into the price
2) This is being compared to the S&P 500, which has returned an average of about 10% per year over the long term -- the pound would have to average a 10% gain per year, every year, to match this
3) On a purchasing power basis, the British Pound (and other major European currencies) are currently significantly overvalued versus the US dollar
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Currencyshares British Pound ETF
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