Low Pound Vs US Growth

The “AWS strategy” - it’s certainly worked well for AWS, although I can’t think off the top of my head of any other good examples.

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Maybe not necessarily investing in the UK or US but somewhere more stable, I guess that really just leaves Asia as well as smaller economies that are looking a bit more stable in this current economic climate.

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@simonpoole Amazon took it even further, in that by building AWS they’ve developed a very general platform that all kinds of businesses can be built on. Initially as a way to run their book and then everything shop, but then, if you take them at their word, realising the potential to sell tech as a way for others to build whatever they liked. I suspect that was always the plan on some level, but have no evidence for it. :slight_smile:

I think Ocado have aimed to make a licensable end to end tech pipeline specifically for supermarket style businesses and used their own grocery business as a test and demo model, as well as a way to fund the development. It’s different to AWS in that it’s less general, but it’s similar in that it can be viewed as a set of separate services where different subsets would be useful for different buyers. eg. a furniture business might make use of the off the shelf service that runs deliveries, but not benefit from the warehouse robotics without a lot more hardware development.

Or if you want to focus on the idea of developing a business as a stepping stone towards a totally different goal (like Amazon running a book shop to develop a cloud computing business) then maybe indulge me and let me suggest SpaceX developing global internet access company Starlink as a way to move closer towards their real business of developing access to Mars. Or even let me stretch it by pointing back to Amazon’s AWS perhaps really just being a funding vehicle for Bezos’ intentions to develop and monopolise an orbital economy.

It is a common argument that the pound has been over valued for some time. As a financial hub, the flows into and out of the city of London kept demand for the pound higher then it otherwise would have been. Also, the pound was seen as a relatively safe haven in times of European stress which also offered it support. With Brexit the value of the pound has fallen due to uncertainty and a weakening of inward flows. This was at the same time as the US Federal Reserve was raising interest rates and, therefore, the US had a far higher risk-free rate then developed alternatives. With the US Federal Reserve shifting to an easing stance the US dollar could fall rapidly. The Aussie dollar has depreciated 10% in a single year due to differing interest rates. We could see this rapidly go the others way. The index ‘set and forget’ strategy does not work when you are investing in difference currencies.

Sure but rates cannot be cut much lower and QE has, largely, run out of steam.

I fully expect GBP to drop against USD because of Brexit (regardless if there’s a deal or not) which is why I’ve focused the majority of my investment outside of the UK and focused on US shares.

I also fully believe that investing in the two biggest cryptocurrencies - BTC and ETH, is a smart move as you’re protecting your money against any potential drop in the devaluing of GBP.

No deal will be an economic disaster. I expect it’ll force the government to drop corporation tax to encourage businesses not to leave the UK and a desperate attempt to bring more investment from businesses outside of the UK.

You made me laugh when suggesting crypto as a hedge… :joy:

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I always laugh at people using “investing” and “cryptocurrency” in the same sentence. I’m like seriously? You’re “investing”? On what thesis?

Most of the people are gambling (or “speculating”) and they have convinced themselves that what they’re doing is sophisticated investing…

I’m not saying that cryptocurrency doesn’t have a future, I’m sure it’s gonna take over at some future point, but as things are right now, it’s just too volatile and opaque for everyone to develop a long term investment thesis on.

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There’s a lot of so-called investors in traditional asset classes who are speculating more than they are genuinely investing, if they’re honest with themselves. Conflating the two happens all the time. As for cryptocurrency, why can you not “invest” in it in the same way as you would gold? Is it that farfetched?

Going back to the pound vs US stocks…also important to look at the currency of operations of the business you are buying…a number of FTSE companies maybe listed in UK and priced in pounds but have majority of sales in foreign currency. Diageo plc is a good example. A significant portion of their sales are made in USD…so a devaluing GBP pushes the value of these sales higher…

The overall higher valuations of stock markets I think comes back to interest rates going nowhere, pension funds growing, stock markets being easier to access and emotions…(FOMO)…

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