Euro vs Contrafund, or how to buy a glider (affordably)

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On Nov. 15, 2004 I posted a message suggesting that you invest your
money in a mutual fund with an excellent track record (i.e. Fidelity
Contrafund) and wait until your $70K initial investment grows to match
the current price of the glider. Here is an update on that strategy:

Euro: $1.2944 (11/15/04)
$1.3165 (3/20/05)
1.7%

FCNTX: $54.79 (11/15/04)
$57.19 (3/20/05)
4.4%

Contrafund has out paced the Euro by a factor of over 2.5. So far the
strategy is working.

Tom Seim
Richland, WA

[Mike the Strike]

snip..
>
> Euro: $1.2944 (11/15/04)
> $1.3165 (3/20/05)
> 1.7%
>
> FCNTX: $54.79 (11/15/04)
> $57.19 (3/20/05)
> 4.4%
>
> Contrafund has out paced the Euro by a factor of over 2.5. So far the
> strategy is working.
>

With the Euro predicted to rise back to 1.35 in the next six months to
a year (which is pretty much where it was just a few days ago) and a
historic annual return of FCNTX of 1.75%, I'm not so sure of the return
provided by your strategy, especially after taking into account buying,
selling and admin fees for the account. These could easily eat up the
2.5% or so you are winning at the moment.

Still, being ahead is always good!

Report back in six months.

Mike


ASW 20 WA

[Tom]

Mike the Strike wrote:
> snip..
> >
> > Euro: $1.2944 (11/15/04)
> > $1.3165 (3/20/05)
> > 1.7%
> >
> > FCNTX: $54.79 (11/15/04)
> > $57.19 (3/20/05)
> > 4.4%
> >
> > Contrafund has out paced the Euro by a factor of over 2.5. So far
the
> > strategy is working.
> >
>
> With the Euro predicted to rise back to 1.35 in the next six months
to
> a year (which is pretty much where it was just a few days ago) and a
> historic annual return of FCNTX of 1.75%, I'm not so sure of the
return
> provided by your strategy, especially after taking into account
buying,
> selling and admin fees for the account. These could easily eat up
the
> 2.5% or so you are winning at the moment.
>
> Still, being ahead is always good!
>
> Report back in six months.
>
> Mike
>
>
> ASW 20 WA

The Contrafund is no-load and the rate of return includes all admin
fees, so this is a real rate of return (unless you trade in less than
90 days from purchase). Predicting future exchange rates accurately
will make you a multi-millionaire, eliminating the need for this
strategy altogether.

Tom