GNP, M&A, EBITDA, P/E, NASDAQ, Econo-thread Part 10

[DanS]

Does anybody have a good link on the difference between index shares and i-shares? Thanks.

GP: The problem with putting all of your affairs on a strict business basis (or even grouping them with "investments" in your mind) is that you have to justify all of your activities as they relate to the bottom line, if you are disciplined. For instance, I am making peanuts on a per hour basis with my current venture. If I tried to rationalize this way of doing things, I would demand $x/hr or whatever in profit or value.

Not that perhaps I will get lucky one of these days and one of these will make some money, but if none of my personal ventures are stood up with viable business models, I will have still made out like a bandit in other ways. If the past is any indication, I will create a new business every 5 or 10 years, so I'm looking out for my own happiness foremost.

Does this make any sense?

[pchang]

http://www.ishares.com

iShares are a specific brand of ETFs (exchange traded funds). ETFs are similar to index based mutual funds. However, they trade like stocks and thus do not have distributions. This gives you more control of taxable events. Also, their fees are lower than that of most index mutual funds. The most famous of these is SPY. This follows the S&P 500. However, for broader coverage of the market, you really want something that covers mid cap and small cap stocks too. iShares has an ETF which matches the Russell 3000. Vanguard has and ETF which matches the Wilshire 5000.

[TCO]

Dan, I'm sure that you will get enjoyment as well as riches from your ventures.

[pchang]

Risk vs. Return

There are many things that go into the Risk vs. Return equation. Not all returns can be measured in monetary terms.

[Jon Miller]

should this thread be attempted on little sleep and food?

or should I give up on something interesting going on and leave for a few hours

Jon Miller

[DanS]

GP: Let's hope so. Thanks!

pchang: So true. So true.

Jon: you don't have to read the rest of the thread before picking it up.

[Saras]

--"There are many things that go into the Risk vs. Return equation. Not all returns can be measured in monetary terms."

Yeah, like sitting at the office at 10:30 PM trying to meet a deadline that you yourself promised to a client. Great fun

[DanS]

I know that I've asked this before, but what %-age of Europe's economy is devoted to ex-Europe exports? I've always thought of Japan of having an export driven economy, but I guess that must be less true nowadays.

Japan: 9.6% --> $460 billion / $4.8 trillion (goods only, Economist, 2000)
US: 10% --> $1 trillion / $10 trillion (goods & svcs., BEA, 2001)
Europe: 12%?

Interestingly, it appears that Canada/US is a more integrated unit than Europe. Canada's goods exports alone account for 40% of their economy. Mexico's is at about 29%, roughly in line with European integration.

[TCO]

Originally posted by Saras
--"There are many things that go into the Risk vs. Return equation. Not all returns can be measured in monetary terms."

Yeah, like sitting at the office at 10:30 PM trying to meet a deadline that you yourself promised to a client. Great fun

What types of services do you provide? What tasks do you personally do in a work day? Just curious.

FYI: I just read Barbarians at the Gate. Very interesting book on a corp takeover.

[el freako]

Originally posted by DanS
I know that I've asked this before, but what %-age of Europe's economy is devoted to ex-Europe exports?

Your guess of around 12% is probably right, when I last checked this (with 1997 data) it was 11.4%

Originally posted by DanS
I've always thought of Japan of having an export driven economy, but I guess that must be less true nowadays.

Nope, Japan's exports have never amounted to more than 13% of it's GDP (by never I mean since 1960 - maybe it was different in the 1520's )

Originally posted by DanS
Interestingly, it appears that Canada/US is a more integrated unit than Europe. Canada's goods exports alone account for 40% of their economy. Mexico's is at about 29%, roughly in line with European integration.

Not comparing like with like here - if you are going to look at a block like NAFTA and compare it with the EU then you would have to exclude intra-NAFTA trade (which amounts to 80%-85% of Canada's and Mexico's trade)
The export/GDP ratio's for Belgium and the Netherlands are over 80% and 60% respectively.

[DanS]

OK, I was guessing on intra-European trade, based roughly on Germany's goods export figures of 29% of GDP, 57% of which is EU. The 12% was a guess that Germany exports more than some other countries in the EU like France, which only exports 22% of GDP.

Anyway, I've always wondered how all of these things showed up in the public psyche. For instance, in the late 80s, Americans feared that Japan was going to dominate the US economy. Or in the late 90s, Europeans somehow feared that the US was taking over the world economically. Further interesting is trying to figure out whether those fears are warranted.

My tentative conclusion is that exchange rate GDP per capita adjusted for how important exports are in the economiy is quite important in some ways, especially with regard to how others perceive you.

edit: Interestingly, and if I'm getting my nominals and reals straight, the US 1997 exports as %-age of GDP was about 11.25%, the high water mark. In 1960, the figure was more like 5%.

[Colon™]

” Anyway, I've always wondered how all of these things showed up in the public psyche. For instance, in the late 80s, Americans feared that Japan was going to dominate the US economy. Or in the late 90s, Europeans somehow feared that the US was taking over the world economically. Further interesting is trying to figure out whether those fears are warranted.”

AFAIK such fears are usually grow out of large trade balance deficits or surpluses, coupled with economic hard-times and politicians and businessmen trying to find a scapegoat for their failures. Examples are US during the 80’s and Japan at the present. (with China being the scapegoat)

Of course this fails to take into account that while there may be a huge gap between exports and imports, this doesn’t mean either constitutes a large share of GDP. (at least not in the sense that countries Japan sells all it manufactures in the US, for instance)

[DanS]

China is the scapegoat for Japan? Interesting. I must not be following the Japanese press too much.

I guess the trade gap could have had an impact on the US in the late 80s, but what of Europe in the late 90s? Europe had a trade surplus with the US, IIRC.

Here's the US numbers...

http://www.schmelzer.org/dschmelzer/econodoodle/Exports%20Share%20of%20GDP.xls

[Ecthy]

just for your information, guys -

the 'GNP' in the title got there because I had opened a thread about worldwide GNP rankings only short before this thread was opened. so this one was inspired by ME

I am thereby now an official memebr of the econogeeks of Apolyton

[Colon™]

Dan,
”I guess the trade gap could have had an impact on the US in the late 80s, but what of Europe in the late 90s? Europe had a trade surplus with the US, IIRC.”

Maybe, but the US economy wasn’t in the doldrums (perceived or real) so there wasn't as much of a temptation to search for scapegoats stealing economic growth and jobs.

BTW you were talking about psychological impact right?