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Where to Invest Right Now: How to Profit From a Weak US Dollar - Bloomberg
I appreciate the thought but following the Bloomberg "gift links" plunks over 20 cookies on my browser and requires signing some kind of legal baloney that is many pages long. Not going to happen.
Since the beginning of the year, every financial pro out there keeps talking about weak dollar prospects and the need to reallocate abroad, yet the stock market keeps going up.
This sounds like a bubble diagnosis, which reminded me of February commentary from Eric Cinnamond of PVCMX titled Bubbleitis. If his prior ailment history is something to go by, we have till ~ November '26 for this one to pop.
26% in US Junk here. The rest of my bonds are all over the quality spectrum. Is Puerto Rico "EM?" Or overseas, foreign? Two of my three single stocks are in LatAm. The other is HQ'd in Panama City. That particular bank just issued a pile of new debt, ostensibly to collect a pile of new cash it could then lend out. But it's not in USD. It's denominated in Mex Pesos. It's a B-2-B bank, originally started to serve the needs of Central banks down there. P.R. uses the dollar, at any rate.
I was not necessarily looking for LatAm banks, but these two looked good when I was shopping and investigating. I insist on getting a dividend of at least 3% due to the higher risk in single stocks as opposed to mutual funds. My third stock is a L.P., Energy Transfer. Midstream oil-gas and LNG. Ticker is ET. (K-1 tax form.)
BLX is already quite a bit above its consensus price target; those predictions are always looking 12 months further out. But for a long-term holding, I'm satisfied with it. I could see it in my portfolio indefinitely. What I see tells me it is thriving. Div yield right now is 5.6%.
FBP is offering a 3.4% div yield. Out of San Juan. Still -17% below consensus target price. Beta is just a tiny bit higher than the Market, at 1.03. And P/E is just 11.3. (BLX P/E = 7.5.)
ET as a company knows not what any sort of limit is. Always looking to add and bolt-on to its existing pipeline system. They have lately agreed to supply electricity-generating natgas to an outfit building an A/I data center in San Marcos, TX. The div has been growing by a quarter of a penny every time. Div yield is currently 7.53%.
OP link has interviews with several advisors. Suggestions are typical - foreign stocks and bonds, US multinationals with overseas revenues and alternatives.
When dollar is weak, foreign investments and profits get a boost on currency conversions. Some of that has been going on already.
BTW, this also why foreign diversification hasn't worked for years as strong dollar imposed a penalty on currency conversion.
Many factors contributed to the weaker dollar. One of them is the increasing US federal debt in trillions, and it is getting worse. Earlier this year the credit quality of US treasury was downgraded by Moody.
Investor concerns had initially mounted after the rating agency Moody’s slashed the U.S.′ credit rating on Friday, bringing it down one notch from Aaa — the highest score — to Aa1. The agency attributed the downgrade to the increasing burden of financing the government’s budget deficit, as well as the high cost of rolling over existing debt amid high interest rates.
“This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,” the rating agency said in a statement.
Institutional money has been flowing toward other asset classes such as developed and emerging market in both stocks and bonds for better returns. The current politics do not helped either. YTD developed market index funds returned about 23% comparing to that of 10% of S&P 500; emerging market index returned 13%. For investors who tilted their oversea exposure early in the year have gained nicely over that of US market.
Thanks to our monthly MFO Commentary, both David Snowball and Lynn Bolin have provided detailed assessment of the current investment and risk mitigation.
@hank, i cannot get behind the paywall either. Tried in several browsers with pop-up blocker turned off. Can you provide a short summary? Thanks
Lynch also revealed his approach of identifying excellent companies in struggling sectors. “I'm always on the lookout for great companies in lousy industries.A great industry that's growing too fast, such as computers or medical technology, attracts too much attention and too many competitors,” he said.
Thanks @Old_Joe / Will run some tests on an unregistered device before sharing more. 5 monthly allowed. So only 1 remaining this month.
Re the discussion - I’ve held a Real Assets fund (big holding) for several years. Mine is only 5% in gold bullion. They are all different in their allocations. Right now it holds 25% in real estate. Also, I opened small “token” positions in Swiss Franc / JP Yen last week as a counter to dollar assets. If they rise they will mitigate downside a small bit. Very low allocation to equities in general. As article may note, longer dated bonds / bond funds aren’t a good choice if higher inflation accompanies the weaker dollar (likely). 1-5 year part of the curve may be appealing.
RAPAX is my real assets fund. Not as successful longer term as Price’s PRAFX. But it’s much less volatile than Price’s offering. I also have a lot of respect for this non-mainstream asset manager.
Thanks @bee / The Lynch video looks appetizing, though haven’t yet viewed it. He was a master investor for sure and easy to listen to. Brings back some great memories.
A class act along with Bogle, Templeton, (Michael) Price in the 80s-90s.
I was not necessarily looking for LatAm banks, but these two looked good when I was shopping and investigating. I insist on getting a dividend of at least 3% due to the higher risk in single stocks as opposed to mutual funds. My third stock is a L.P., Energy Transfer. Midstream oil-gas and LNG. Ticker is ET. (K-1 tax form.)
Yessir! I've looked at DHL, too. But I don't wanna have tax removed before I see my dividend. That's what the Norwegian Tax Authority did when I owned Norsk Hydro. A great company, been around forever. NHYDY ticker, OTC in USA. A 25% haircut. I sold it--- especially because we owe no US federal income tax. So, why pay the Europeans, eh? https://www.stockrover.com/quotes/insight/analysts/Quotes/q_NHYDY
I bought into DHLGY a few months ago. They're the go-to folks in Europe and also are popular in RoW. Nice dividend and besides the German witholding I get back on my taxes anyway.
Fedex/UPS are mainly US-centric players that will feel the hit of any US recession/stagflation or decision by non-US companies to use non-US providers to ship things around the world.
Yessir! I've looked at DHL, too. But I don't wanna have tax removed before I see my dividend. That's what the Norwegian Tax Authority did when I owned Norsk Hydro. A great company, been around forever. NHYDY ticker, OTC in USA. A 25% haircut. I sold it--- especially because we owe no US federal income tax. So, why pay the Europeans, eh? https://www.stockrover.com/quotes/insight/analysts/Quotes/q_NHYDY
Related to DHL... Overseas mail carriers are starting to suspend shipments to the US over tariff nonsense.
Yessir! I've looked at DHL, too. But I don't wanna have tax removed before I see my dividend. That's what the Norwegian Tax Authority did when I owned Norsk Hydro. A great company, been around forever. NHYDY ticker, OTC in USA. A 25% haircut. I sold it--- especially because we owe no US federal income tax. So, why pay the Europeans, eh? https://www.stockrover.com/quotes/insight/analysts/Quotes/q_NHYDY
Related to DHL... Overseas mail carriers are starting to suspend shipments to the US over tariff nonsense.
Glad you let us all know! Thank you. Trumpy's tariff crap is hitting ordinary people like myself. Some of my 'scripts I order through Winnipeg. Somehow, my stuff gets sent to me via the Belgian Post. They are among those suspending delivery to the US. I expect there are alternatives, but this whole picture is shit.
I bought into DHLGY a few months ago. They're the go-to folks in Europe and also are popular in RoW. Nice dividend and besides the German witholding I get back on my taxes anyway.
Fedex/UPS are mainly US-centric players that will feel the hit of any US recession/stagflation or decision by non-US companies to use non-US providers to ship things around the world.
I am still thinking about DHLGY but bought some UPS in the meantime. I agree that FedEx/UPS are more US-centric but those shipments refused by national posts have to go somewhere and US carriers should get their share. Plus, UPS looked to be on a bit of a sale after the recent earnings miss and dividend yield up to ~ 7.5%.
Comments
This sounds like a bubble diagnosis, which reminded me of February commentary from Eric Cinnamond of PVCMX titled Bubbleitis. If his prior ailment history is something to go by, we have till ~ November '26 for this one to pop.
BLX and FBP.
I was not necessarily looking for LatAm banks, but these two looked good when I was shopping and investigating. I insist on getting a dividend of at least 3% due to the higher risk in single stocks as opposed to mutual funds. My third stock is a L.P., Energy Transfer. Midstream oil-gas and LNG. Ticker is ET. (K-1 tax form.)
BLX is already quite a bit above its consensus price target; those predictions are always looking 12 months further out. But for a long-term holding, I'm satisfied with it. I could see it in my portfolio indefinitely. What I see tells me it is thriving. Div yield right now is 5.6%.
FBP is offering a 3.4% div yield. Out of San Juan. Still -17% below consensus target price. Beta is just a tiny bit higher than the Market, at 1.03. And P/E is just 11.3. (BLX P/E = 7.5.)
ET as a company knows not what any sort of limit is. Always looking to add and bolt-on to its existing pipeline system. They have lately agreed to supply electricity-generating natgas to an outfit building an A/I data center in San Marcos, TX. The div has been growing by a quarter of a penny every time. Div yield is currently 7.53%.
When dollar is weak, foreign investments and profits get a boost on currency conversions. Some of that has been going on already.
BTW, this also why foreign diversification hasn't worked for years as strong dollar imposed a penalty on currency conversion.
https://barchart.com/stocks/quotes/$DXY/interactive-chart
Many factors contributed to the weaker dollar. One of them is the increasing US federal debt in trillions, and it is getting worse. Earlier this year the credit quality of US treasury was downgraded by Moody. https://cnbc.com/2025/05/19/us-treasury-yields-moodys-downgrades-us-credit-rating.html
Institutional money has been flowing toward other asset classes such as developed and emerging market in both stocks and bonds for better returns. The current politics do not helped either. YTD developed market index funds returned about 23% comparing to that of 10% of S&P 500; emerging market index returned 13%. For investors who tilted their oversea exposure early in the year have gained nicely over that of US market.
Thanks to our monthly MFO Commentary, both David Snowball and Lynn Bolin have provided detailed assessment of the current investment and risk mitigation.
@hank, i cannot get behind the paywall either. Tried in several browsers with pop-up blocker turned off. Can you provide a short summary? Thanks
peter-lynch-stock-market-bestl
His thoughts back in Back in 1997:
Re the discussion - I’ve held a Real Assets fund (big holding) for several years. Mine is only 5% in gold bullion. They are all different in their allocations. Right now it holds 25% in real estate. Also, I opened small “token” positions in Swiss Franc / JP Yen last week as a counter to dollar assets. If they rise they will mitigate downside a small bit. Very low allocation to equities in general. As article may note, longer dated bonds / bond funds aren’t a good choice if higher inflation accompanies the weaker dollar (likely). 1-5 year part of the curve may be appealing.
RAPAX is my real assets fund. Not as successful longer term as Price’s PRAFX. But it’s much less volatile than Price’s offering. I also have a lot of respect for this non-mainstream asset manager.
A class act along with Bogle, Templeton, (Michael) Price in the 80s-90s.
I've been looking at DHL / Deutsche Post for the yield myself (and, hopefully, some improvements in Europe if the situation in Ukraine gets better).
https://www.stockrover.com/quotes/insight/analysts/Quotes/q_NHYDY
Fedex/UPS are mainly US-centric players that will feel the hit of any US recession/stagflation or decision by non-US companies to use non-US providers to ship things around the world.
https://archive.ph/MSlxl (BBG article)
Orange Cretin Clown...
Korea Post and Sweden’s PostNord are getting into the "no shipments to US" game.
I am still thinking about DHLGY but bought some UPS in the meantime. I agree that FedEx/UPS are more US-centric but those shipments refused by national posts have to go somewhere and US carriers should get their share. Plus, UPS looked to be on a bit of a sale after the recent earnings miss and dividend yield up to ~ 7.5%.