currency fluctuations (2 Viewers)

[redhugh]

Anyone else smarting from the latest currency fluctuations . From only a few weeks ago when the Australian Dollar was nearing parity with the USD its now only 1 USD = 1.38668 AUD (or 1 aud = 0.71 us)

Ouch ..

 

[Rethymno]

Absolutely! Puts the talk about price increases into pespective...

 

[Njja]

The World's economy seems to be facing a difficult period.

Yet no real explination how it happened!

Interesting.

 

[redhugh]

The World's economy seems to be facing a difficult period.

Yet no real explination how it happened!

Interesting.

There was a saying, "When America Sneezes the rest of the world catches the flu" I think its more like When America coughs up both its lungs the world slowly suffocates When and where will it end This seems to be a big one

 

[Ragnar]

I do feel the pain .
A few weeks ago the Aussie was .98c.... I even had a small order from the U.S just a couple of box's of plastics.... wich worked out great cost wise.
Now i just picked up a bunch of Conte metal (painted and unpainted).
and the #&*@#! Dollar slumps to .70c

 

[vandilay]

We have gone from $1 kiwi buying $.80 US down to $.63 in a very short
space of time [3 cents alone last night] .Our market has very few
financial stocks but it is still getting a pasting.
I wonder how polystone tastes on toast .

 

[OzDigger]

It's wrong that we have to suffer because of poor lending in another country. Especially when you consider that the Australian economy was fine and our sub prime mortgages were less than 1% of housing loans compared to about 15% in the US.

And it makes no sense to blame sub prime borrowers for over committing on housing loans. I have over 16 years experience in lending with Australia's largest bank and few applicants I interviewed had much of an idea about how much they could afford to borrow. This whole problem resulted from poor lending practices supported by poor political decisions.

That said, house prices have been over inflated for years and the poo was going to hit the fan sooner or later.

 

[jazzeum]

Things look like they're going to be grim for a long time and this hobby is going to take a big hit.

 

[Rutledge]

There are clear indications that consumers are already slowing their discretionary spending. Meaning, consumers' percent of expenditures on things that are vital to their lives i.e., "staples", has increased, while spending on that things that arent absolutely necessary to their lives has decreased. (some of you may see toy soldiers as essential -- others perhaps not

Certainly this hobby, as well as other like "non-core" activities, will likely experience "demand destruction" among their customer base. The depth to which people will lower their purchases of discretionary products and services is not possible to know, but most expect it to be fairly significant, and to last for some time.

However, there may be some relatively good news. In an environment where GLOBAL economic activity is slowed, deflationary pressures will dominant. We may therefore see price decreases going forward, certainly in terms of new products. There may also be fewer new releases. Of course the bad news is that the same downward pressure may exert its influence on re-sale items via ebay, etc.

The toy soldier market is also likely to experience a more defined bifurcationation. Meaning that manufacturers will choose to focus on either the low end or high end. Meanwhile the middle may become largely ignored.

 

[OzDigger]

There are clear indications that consumers are already slowing their discretionary spending. Meaning, consumers' percent of expenditures on things that are vital to their lives i.e., "staples", has increased, while spending on that things that arent absolutely necessary to their lives has decreased. (some of you may see toy soldiers as essential -- others perhaps not

Certainly this hobby, as well as other like "non-core" activities, will likely experience "demand destruction" among their customer base. The depth to which people will lower their purchases of discretionary products and services is not possible to know, but most expect it to be fairly significant, and to last for some time.

However, there may be some relatively good news. In an environment where GLOBAL economic activity is slowed, deflationary pressures will dominant. We may therefore see price decreases going forward, certainly in terms of new products. There may also be fewer new releases. Of course the bad news is that the same downward pressure may exert its influence on re-sale items via ebay, etc.

The toy soldier market is also likely to experience a more defined bifurcationation. Meaning that manufacturers will choose to focus on either the low end or high end. Meanwhile the middle may become largely ignored.

Yes, I think the more affluent collectors will concentrate on the very limited and more expensive yet detailed models whilst those with less disposable income will chase the older lower priced sets. This will leave the more recent high priced and high volume sets waiting on the shelves until the wheel turns. And who knows how long that may take.

 

[Peter Reuss]

For many collectors, does the effect the downturn in the economy has on many collector's spending derive from a perception that there will not be money available to purchase or from a reality that there is now not as much money available to purchase toy soldiers?

If a collector has a fairly stable job that continues with a constant income, what has changed? True, the stock market has crashed down, but does the money people have in stocks get turned around into toy soldier purchases?

Now, I know that the 'stable job' theory doesn't apply to everyone. Those who fear for the stability of their employment will obviously save wherever possible.

Psychology plays a huge part in all of this. If people perceive that the economy isn't doing well, they curtail purchases and thus bring about the recession that is feared. If people perceive the economy is doing well, they spend more and drive the economy forward.

For some collectors, putting off purchases will be due to a reality of less income. For others, it may be due to a perception of less income. Other collectors will say, "Nothing has changed in my book, so I'll keep doing what I'm doing!" Some may even see their soldiers as a safe refuge (emotionally or literally) from the craziness of the financial markets.

This tends towards the simplistic side, but it could by why I decided AGAINST majoring in economics in college (I started on that path) and ended up majoring in psychology.

 

[Njja]

Pete:

Problem I see is how many people now invest. If you were buying companies

yourself via stock you would know your companies and could watch how this

situation affects them. I believe you would be more comfortable if you felt

your investments were still sound, and might even look for the bottom....or

a "target price" to add to your holdings.

If on the other hand you are in funds all you are seeing is a loss. One friend

of my wifes has lost 25% of her retirement account just last week! If she

loses another 25% this week and pulls her money from the fund she will never

recover the loss.

I think people seeing this loss in their retirement accounts may cause them

to consider other solutions, which may effect their spending.

 

[Rutledge]

If only it was “just” a stock market thing, or even just a housing thing! The fear/problem is that the nasty real estate and financial markets are infecting the “real” economy. There was an article in the WSJ today about a number of different types of businesses, from hotels to limousine services, that are seeing sales decline precipitously as customers (financial institutions) literally vanish amongst the market meltdown.

Most economists are now expecting an economic recession. To what degree is debatable. Most do not think a depression-era like downturn is likely. But there a few who see even worse than that! 

There are some “counter-cyclical” types of businesses that will probably prosper. Bankruptcy attorneys, for example? But generally speaking immunity from an overall market downturn will be rare.

 

[OzDigger]

It's true that perception is a significant factor and the share market and economic situation will impact on collectors in a variety of ways, some more, some less.

However the fact remains that prices of TS sets have risen substantially over recent times which is exacerbated in Australia by a significant reduction in our currency against the US dollar.

 

[jazzeum]

This is hardly a question of perception v. reality because perception is, in fact, the reality. The economy is not doing well and the contagion has spread to other parts of the world. I received my September statement from my investment advisors and I can tell you it was not a pretty picture.

Although many of us have very good paying jobs, incomes are not rising sufficiently to match inflationary trends in many areas, thereby reducing what you have for discretionary spending. In some cases, as costs rise, but income does not, you may have to touch some of your investments. However, if your investments are suffering, you need to cut costs, thereby reducing (again, at the sake of repetition) discretionary spending and what are toy soldiers but discretionary spending?

 

[Rutledge]

I have to take issue with the idea of mutual fund investing being a "bad thing", or somehow responsible for the panic.

- Mutual funds allow investors with very modest means to own a very diversified portfolio of securities. Diversification is the best and most simple method for reducing overall portfolio risk.
- The vast, vast majority of people dont have the time or desire to learn how to truly evaluate the business prospects of individual companies. It takes a great degree of training and knowledge to really understand how a company makes money, and what its future prospects are. Even those who are trained in doing so dont always get it right!
- Those who, on a part time basis, can select the best stocks from the, literally, thousands and thousands available, and can do a better job than the more educated, highly experienced and trained pros, who also have more resources and time, are extremely rare.
- Most people have little to no interest in understanding the financial markets. Im sure it would be much more efficient for me to repair my own car, but I have no interest in becoming a mechanic.
- Ironically, a great company can even be a bad investment, due to too high valuations. Most investors buy in AFTER something has already proven to be a great investment. Seems counter-intuitive, but that is usually the worst!
- Mutual funds are also one of the cheapest ways to access and own lots of different types of securities from around the world. The problem most people have is they dont own enough different TYPES of mutual funds. One should spread investments across many different areas.

 

[Njja]

I'm not saying (if you took it from my post) that Mutual Funds are a bad

thing.......but if you took the time to earn the money, why not decide for

yourself how to invest it?

Its your money, is it going to be laborious to look around at companies you

do business with and like. Read up on them and decide to acquire say 100

shares. Then move on to another company you admire.

You might have a favorite car manufacter, grocery store, home center, brand

of soda, beer. Heck for awhile I had shares in the Boston Celtics!

Now Fund managers don't like someone like me......because they charge

fees.......to buy, sell, sometimes to manage your money.

Personally if I'm going to lose a bit I want it to be my decision.

If its to much work to decide how to invest your money.....who do you

really blame when its gone?

Even many celebrities have lost fortunes for example John Wayne because

they were convinced it was too time consuming to manage their investments.

If you have so much $$$ its just to much trouble to figue out what to do

with it yourself.......WOW!

 

[Rutledge]

There are over 5000 mutual funds in existence. Just picking among THEM takes considerable time and skill! Selecting, and montoring, appropriate mutual funds is not a no-brainer. Just ask those who had all their eggs in the Legg Mason Value Trust fund!

When you buy stocks you always pay a commission, and possibly market impact costs. So buying (or selling) stocks is not free. Also, buying stocks of companies that you like and admire may be an enjoyable diversion, but it is hardly the most effective method for doing so. Getting a thrill from being a "part owner" of something like the Boston Celtics is one thing. But really, from an investment standpoint, that is not relevant. Investing is about the returns you receive, over time, relative to the risk taken.

Bottom line is most investors will not outperform the markets on their own. If he or she can beat the markets (combination of domestic/international stocks, bonds, alternatives) over time, and can verify results are at least in line with the market, if not better, then by all means, go for it.

Very wealthy people usually outsource their investing decisions. Not because of any laziness or lack of concern. But because of the principle of specialization of labor. They also realize that its very complicated. Being on top of the markets, that are constantly changing, is a full time job. Also, the stock market is just one area. There are thousands of types of bonds, preferred shares, convertible securities, etfs, structured investments, many many many ways to invest and make money than just stocks of american companies.

 

[Louis Badolato]

For many collectors, does the effect the downturn in the economy has on many collector's spending derive from a perception that there will not be money available to purchase or from a reality that there is now not as much money available to purchase toy soldiers?

If a collector has a fairly stable job that continues with a constant income, what has changed? True, the stock market has crashed down, but does the money people have in stocks get turned around into toy soldier purchases?

Now, I know that the 'stable job' theory doesn't apply to everyone. Those who fear for the stability of their employment will obviously save wherever possible.

Psychology plays a huge part in all of this. If people perceive that the economy isn't doing well, they curtail purchases and thus bring about the recession that is feared. If people perceive the economy is doing well, they spend more and drive the economy forward.

For some collectors, putting off purchases will be due to a reality of less income. For others, it may be due to a perception of less income. Other collectors will say, "Nothing has changed in my book, so I'll keep doing what I'm doing!" Some may even see their soldiers as a safe refuge (emotionally or literally) from the craziness of the financial markets.

This tends towards the simplistic side, but it could by why I decided AGAINST majoring in economics in college (I started on that path) and ended up majoring in psychology.

Pete,

In my case, as the proprietor of my own small business (my appellate practice), the perception or reality of an economic downturn on the part of the attorneys who are my clients has had a very real, if indirect, effect on my income . . . I am still busy, and on paper I have had one of my best years, but I have had to dip into my savings almost on a weekly basis to pay my bills, as my clients are simply not paying on invoices for months and months. I have 3-4 times as much in accounts payable as I had in the past, and much less actual cash flow each week or month. In no uncertain terms this has caused me to cut back on my collecting. I still feed my addiction, but my monthly toy soldier expenditures are less than half of what they were last year. I suspect that as prices go up, I will be limiting my collecting to "must have" pieces, so being a completist is going to go by the wayside. I simply have to reallot my funds from my hobby to cover the rising costs of necessities like gas, heating oil, food, etc. In fact, as far as I can see, the only thing that is not rising in the present economy is people's incomes. In this environment, I suspect companies which are both producing large quantities of product and substantially raising their prices are going to be in for a rude awakening.

 

[Njja]

There are over 5000 mutual funds in existence. Just picking among THEM takes considerable time and skill! Selecting, and montoring, appropriate mutual funds is not a no-brainer. Just ask those who had all their eggs in the Legg Mason Value Trust fund!

When you buy stocks you always pay a commission, and possibly market impact costs. So buying (or selling) stocks is not free. Also, buying stocks of companies that you like and admire may be an enjoyable diversion, but it is hardly the most effective method for doing so. Getting a thrill from being a "part owner" of something like the Boston Celtics is one thing. But really, from an investment standpoint, that is not relevant. Investing is about the returns you receive, over time, relative to the risk taken.

Bottom line is most investors will not outperform the markets on their own. If he or she can beat the markets (combination of domestic/international stocks, bonds, alternatives) over time, and can verify results are at least in line with the market, if not better, then by all means, go for it.

Very wealthy people usually outsource their investing decisions. Not because of any laziness or lack of concern. But because of the principle of specialization of labor. They also realize that its very complicated. Being on top of the markets, that are constantly changing, is a full time job. Also, the stock market is just one area. There are thousands of types of bonds, preferred shares, convertible securities, etfs, structured investments, many many many ways to invest and make money than just stocks of american companies.

Very true, oh its just to hard!

Isn't that how we got in this mess?

Do you think the people that lost part of the 2 Trillion lost today in retirement

accounts would agree?

First question I would ask a financial expert is "Are you a Millionare"? If the

answer is no......I'm heading for the door.

Do financial planners provide a service? Yes

Do fund managers provide a service? Yes.....though of late?

Should people consider handling their own money?

Ah yes.

Does it work? Is it possible? Could it be done?

Yes.

Just my opinion.......and any window I'm jumping out of is in the

basement.