Putgolzin Posted October 8, 2015 Share Posted October 8, 2015 Yes, just why are they saving in US dollars instead of being proud Argentines by holding it in ARS? And about that real estate, are transactions generally paid for in cash or with a mortgage? And when they do exchange between ARS and foreign currencies, do they use the government-mandated rate or the dolar blue rate? Yeah, US dollars are used for saving because the currency is such a disaster. And as you've suggested, they definitely think in the "blue" for exchange. The real estate is paid for in cash...mortgages aren't a thing, they're just isn't enough strength in the banks to be putting out that sort of credit. As you're thinking on a level far above what mine works at, what would be the conclusions you would draw from that both negative and positive? And further...for a Canadian potentially looking to invest with these legitimate friends who have legitimately successful businesses...what would your fears or counsel be? 1 Link to comment Share on other sites More sharing options...
Hugor Hill Posted October 8, 2015 Share Posted October 8, 2015 Among the people I hang out with it seems there is WAY more opportunity today than there was a generation ago. I'm not talking just going out and getting a J.O.B. though...if someone wants to do things the way the Boomers did and just be a cog in the wheel for 45 years I would agree absolutely that the world is a harder place to get ahead. On the other hand, from the point of view of entrepreneurship it seems like its the wild west again...if someone is willing to work their arse off for themselves (and they're a little-bit-not-stupid) there is an ample amount of self-made success ready to be had. Yeah that I actually agree with a lot, especially in the technology sector. However, I did have a conversation with a Uber driver who built his financial empire in the 80's, sold it and retired early. He said that with deregulation, an entrepreneur in the financial sector can no longer do that because all the deregulations favour the big banks. Link to comment Share on other sites More sharing options...
mdehaan Posted October 8, 2015 Share Posted October 8, 2015 You are not taking interests and / or investment returns into consideration. Over 20 years most investments would do better than inflation. Only mattress savers would suffer from your scenario. Go ahead and factor in interest and returns into the equation and do that math. The conclusion you will come to is you are understating the loss of purchasing power over a 20 year period. (pointed out by the examples in post #129.) Give me an example of anything that has not doubled in price since 1995. Link to comment Share on other sites More sharing options...
Hugor Hill Posted October 8, 2015 Share Posted October 8, 2015 Go ahead and factor in interest and returns into the equation and do that math. The conclusion you will come to is you are understating the loss of purchasing power over a 20 year period. (pointed out by the examples in post #129.) Give me an example of anything that has not doubled in price since 1995. tsk tsk tsk... You can buy a decent desktop system for less than $1000 today. You couldn't do that at all in 1995. My first computer was $2000 in the late 90's. Not to mention a $1000 computer today is infinitely more powerful than a $1000 computer in 1995. Same goes for pretty much all media electronics and computer software. I remember saving money to buy my Sega Genesis in the early 90's for $299. Nowadays a PS4 is $399. A modest 50% increase over a period of 20 years. Nowadays we can watch as much TV and movies as you can handle for what, $10 a month on Netflix? You couldn't do that in the 90's. CD's and DVD's used to be $10 to $20 in the 90's. They are still $10 to $20. Cheaper if you buy from iTunes. Books. Especially if you buy them in electronic formats. There are others I'm sure. *** On the other hand, a $1000 investment in 1995 at a very modest average annual return of 5% will yield you around $2653 today, a 265% increase. Link to comment Share on other sites More sharing options...
mdehaan Posted October 8, 2015 Share Posted October 8, 2015 tsk tsk tsk... You can buy a decent desktop system for less than $1000 today. You couldn't do that at all in 1995. My first computer was $2000 in the late 90's. Not to mention a $1000 computer today is infinitely more powerful than a $1000 computer in 1995. Same goes for pretty much all media electronics and computer software. I remember saving money to buy my Sega Genesis in the early 90's for $299. Nowadays a PS4 is $399. A modest 50% increase over a period of 20 years. Nowadays we can watch as much TV and movies as you can handle for what, $10 a month on Netflix? You couldn't do that in the 90's. CD's and DVD's used to be $10 to $20 in the 90's. They are still $10 to $20. Cheaper if you buy from iTunes. Books. Especially if you buy them in electronic formats. There are others I'm sure. *** On the other hand, a $1000 investment in 1995 at a very modest average annual return of 5% will yield you around $2653 today, a 265% increase. The decrease in costs for electronics is due to an increase in productivity and technological advancements, not price deflation. Electronics are way overpriced when they are initially launched. Not only that, but the common household doesn't have an 'electronics' cost every month and if they did, it would be minimal relative to their cost of living. *** I don't know about you, but its not too often I have $1000 sitting around to make sure I can get a 5% annual return on that investment.. Link to comment Share on other sites More sharing options...
mdehaan Posted October 8, 2015 Share Posted October 8, 2015 From an investment perceptive, I like the US dollar and US stocks. There may be further downside to the stock market but with more easing comes rising stocks. The trend for housing, real assets and commodities is still down. IMO Link to comment Share on other sites More sharing options...
Hugor Hill Posted October 8, 2015 Share Posted October 8, 2015 The decrease in costs for electronics is due to an increase in productivity and technological advancements, not price deflation. Electronics are way overpriced when they are initially launched. Not only that, but the common household doesn't have an 'electronics' cost every month and if they did, it would be minimal relative to their cost of living. *** I don't know about you, but its not too often I have $1000 sitting around to make sure I can get a 5% annual return on that investment.. Fine. You don't have a $1000?? Sure we all want more than 5% return but I was being conservative. Link to comment Share on other sites More sharing options...
Offensive Threat Posted October 9, 2015 Share Posted October 9, 2015 *** On the other hand, a $1000 investment in 1995 at a very modest average annual return of 5% will yield you around $2653 today, a 265% increase. I don't know about you, but its not too often I have $1000 sitting around to make sure I can get a 5% annual return on that investment.. A annual return of 10% would still be modest. Add a couple % for reinvesting dividends. The Dow Jones Industrial average from 1995 to 2015 is over 300%. Link to comment Share on other sites More sharing options...
mdehaan Posted October 10, 2015 Share Posted October 10, 2015 A annual return of 10% would still be modest. Add a couple % for reinvesting dividends. The Dow Jones Industrial average from 1995 to 2015 is over 300%. And what is the inflation rate over the same period? Link to comment Share on other sites More sharing options...
Offensive Threat Posted October 10, 2015 Share Posted October 10, 2015 And what is the inflation rate over the same period? 156% according to the inflation calculator provided by the U.S. Bureau of Labor Statistics. Since the Dow is US I figured a US inflation rate was appropriate. But all these numbers are kinda weak without any mention of taxation which can be minimal or insane depending on your personal situation and volume/type of investments. Link to comment Share on other sites More sharing options...
THERETOOL Posted October 10, 2015 Share Posted October 10, 2015 I've been to Argentina a number of times in the past 10 years; while the currency itself is a disaster the economics of the country are WAY better than before. The friends I had when I lived there in the 90's have all improved their lives dramatically with regard to their personal wealth. One friend who was poor-ish in that era is now a multi-multi-millionaire (perhaps a billionaire). My best friend from there would be just around a millionaire. damn , you are just so very wrong .. I live in argentina .. its corrupt , poor and going down the venezuelan tube faster than you can say communist .... nzan I just gotta call b.s with what you've said here ... what a load of garbage Link to comment Share on other sites More sharing options...
Hugor Hill Posted October 10, 2015 Share Posted October 10, 2015 So you guys think we have hit the bottom? An internal report I was privy to from one of the major banks says we are near bottom. What do you guys think? Link to comment Share on other sites More sharing options...
mdehaan Posted October 10, 2015 Share Posted October 10, 2015 So you guys think we have hit the bottom? An internal report I was privy to from one of the major banks says we are near bottom. What do you guys think? In stocks? Link to comment Share on other sites More sharing options...
mdehaan Posted October 10, 2015 Share Posted October 10, 2015 156% according to the inflation calculator provided by the U.S. Bureau of Labor Statistics. Since the Dow is US I figured a US inflation rate was appropriate. But all these numbers are kinda weak without any mention of taxation which can be minimal or insane depending on your personal situation and volume/type of investments. Would I be wrong if I said that the majority of the prices for all goods and services in the US, rose faster than 156% from 1995-2015? Link to comment Share on other sites More sharing options...
jejejester Posted October 10, 2015 Share Posted October 10, 2015 Would I be wrong if I said that the majority of the prices for all goods and services in the US, rose faster than 156% from 1995-2015? So your saying that average price growth actually out grew average inflation over the last 20 years? Would be interesting to look up Link to comment Share on other sites More sharing options...
mdehaan Posted October 10, 2015 Share Posted October 10, 2015 So your saying that average price growth actually out grew average inflation over the last 20 years? Would be interesting to look up This is what I'm saying: The official inflation rate for any Canada or the US is probably accurate. However, the problem is, the official inflation rate has little to do with the common household. If the CPI is 150%-175% over the past 20 years but 'my inflation rate' or the things that I purchase most is 300%-350%, then what good is the CPI to me? Food, housing, utilities, insurance, fuel have all had to at least quadrupled since 1995. If I have own an investment fund, I think the official CPI rate would make sense to me. Link to comment Share on other sites More sharing options...
Offensive Threat Posted October 11, 2015 Share Posted October 11, 2015 This is what I'm saying: The official inflation rate for any Canada or the US is probably accurate. However, the problem is, the official inflation rate has little to do with the common household. If the CPI is 150%-175% over the past 20 years but 'my inflation rate' or the things that I purchase most is 300%-350%, then what good is the CPI to me? Food, housing, utilities, insurance, fuel have all had to at least quadrupled since 1995. If I have own an investment fund, I think the official CPI rate would make sense to me. Everybody who wasnt there or was a kid in 1995 thinks prices have gone up so much on everything. On housing, Yes, in Greater Vancouver especially, pricing has gone through the roof, everything else, not so much. Flights are so much cheaper now. You couldnt go to Expedia back then to get a great rate on a hotel. It didnt exist. None of those sites did. Amazon? Ebay? Craigslist? No no and no. The internet existed but buying anything online was still very new. (Ebay actually did start in Sept 1995 but it was so small it was a side business of 1 man). Go to Costco and find anything that costs 3X as much now. Christ a lot of basic stuff is cheaper. P.S. The average price of gas at the pump in Canada right now is $1.04 liter. Exactly 10 years ago it was $1.04 liter . But gas prices have always been tied to Saudia Arabia and OPEC playing politics more than actual free market inflation. Average new car/truck price in 1995: $19,850 . in 2015: $33,400. So 168%. Link to comment Share on other sites More sharing options...
Hugor Hill Posted October 11, 2015 Share Posted October 11, 2015 So you guys think we have hit the bottom? An internal report I was privy to from one of the major banks says we are near bottom. What do you guys think? In stocks? Yeah stocks. Link to comment Share on other sites More sharing options...
CanuckGAME Posted October 11, 2015 Share Posted October 11, 2015 (edited) So. Has anyone become rich from this thread yet? For real though. I'll be the guinea pig. I'll throw 1000 bucks into some stocks just for fun and I'll do a play by play of how it ends up. Only 1000 bucks though because I don't trust you guys LOL. I'm serious. Let's see what CDC can turn my $1000 into. If I lose it oh well, if you turn it into some real money cool! I'll donate 10% of all profits to canucks place. Come on CDC make me a millionaire. Edited October 11, 2015 by CanuckGAME Link to comment Share on other sites More sharing options...
CanadianLoonie Posted October 11, 2015 Share Posted October 11, 2015 So. Has anyone become rich from this thread yet? For real though. I'll be the guinea pig. I'll throw 1000 bucks into some stocks just for fun and I'll do a play by play of how it ends up. Only 1000 bucks though because I don't trust you guys LOL. I'm serious. Let's see what CDC can turn my $1000 into. If I lose it oh well, if you turn it into some real money cool! I'll donate 10% of all profits to canucks place. Come on CDC make me a millionaire. The thread is only just over a month old... Link to comment Share on other sites More sharing options...
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