Risk/Reward Vol. 323
THIS IS NOT INVESTMENT OR TAX ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN.
We have just returned from Paris . If the world is relying upon France to jump start its economy, fuggitaboutit. Ten percent of France's gross domestic product derives from tourism. That of Paris is even more tourist dependent with over 500,000 people directly employed in that industry. Thanks to the threat of terrorism and squabbles with Russia tourism is down over 12% with foreign tourists staying away in droves. There has been a 46% decline in the number of Japanese tourists, 35% decline in Russian tourists and a 20% decline in Chinese tourists. Talk to any cabbie or tour guide about it, and their faces drop. What did it mean for Barb and me? How about a round trip ticket Chicago to Paris, taxes included, for $494? How about a half empty plane on the way home so that we could stretch out even in steerage? How about a "small group tour" that was so small it was only Barb and me? How about waiting in line only once to see a major historical site? How about dinner reservations anywhere we wanted? How about a one bedroom apartment on the "Fifth Avenue" of Paris (Rue St. Honore, one block from the Tuilerie gardens) for $290/night, all in? We spent more on air tickets and on a per diem basis for our trip to Philadelphia last fall. Let's see, you choose-- Paris or Philly?
I will publish a more fulsome edition next week. I do note however that the markets had a nice finish to the week and to the quarter. The Dow Jones Industrial Average is up 5% and the S&P 500 up 6% year to date. Moreover, oil caught a tail wind with news that OPEC may actually curtail production below 33million barrels/day. If true, this level would start to drain inventories as early as next year. The devil is in the details which are to be agreed, if at all, at OPEC's November 30th meeting. Some speculate that OPEC may rethink this strategy given that domestic US producers, who have become more efficient during the oil price decline, stand to be big winners if OPEC production is cut.
We had a great time in France, but are glad to be home.
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