A Financial Question

[Taosman]

Toyota has, I believe 13 US plants spread across the country employing many Americans. They did this on purpose to have more influence in politics.

"In 13 locations across North America, more than 30,000 team members are producing* over 1.5 million vehicles, more than 1.3 million engines, and nearly 400,000 automatic transmissions per year. In fact, 11 Toyota and Lexus models are built in North America with parts purchased from hundreds of North American supplier locations.
Our annual U.S. spending on parts, goods and services with suppliers totals more than $29 billion** and counting, as Toyota continues to grow and build more vehicles, engines and transmissions in North America."

"If a company is working on multiple exchanges across the globe in different time zones and some news breaks that affects the companies shares. Could someone short/long or make a play with their shares off of the good/bad news before the market started trading in another time zone?"

In practice you could as there is "after hours" trading. This is an extra charge compared to normal day trading. And obviously, this happens. Pro traders do this and don't mind the expense. I have found this not worth my time.

 

[DaytonBuck]

Toyota has, I believe 13 US plants spread across the country employing many Americans. They did this on purpose to have more influence in politics.

"In 13 locations across North America, more than 30,000 team members are producing* over 1.5 million vehicles, more than 1.3 million engines, and nearly 400,000 automatic transmissions per year. In fact, 11 Toyota and Lexus models are built in North America with parts purchased from hundreds of North American supplier locations.
Our annual U.S. spending on parts, goods and services with suppliers totals more than $29 billion** and counting, as Toyota continues to grow and build more vehicles, engines and transmissions in North America."

So the Japanese government in hypothetical scenario goes Yukos on Toyota, can I make some money off of this happening a different time zone before it would a market Toyota is in?

 

[Taosman]

So the Japanese government in hypothetical scenario goes Yukos on Toyota, can I make some money off of this happening a different time zone before it would a market Toyota is in?

Toyota is the worlds biggest car manufacturer. They are literally in every market. Your chances of making money in this particular scenario is not great. But, you can buy and hold Toyota stock as it is profitable long term. Jim Kramer(Mad Money) would say start nibbling on the way down
(stock heading down) and add long term. Or divide you stock into 2 buys.

 

[Taosman]

There are more knowledgeable people than me. NewYorkBuck, for one.
But, trying to make money on day trades in this market is tough and takes
a real commitment in time and money. A simple ETF (Exchange Traded Fund) of the S&P 500 will make you money over time.

 

[Buckeye Buh Nim]

This a hypothetical for my own ignorance but what kind of effect would bad news for say Toyota have on stock prices in American and Japan. Would one share on a certain exchange get more or less of the blow than the other? Would they both react the same across the board?

If a company is working on multiple exchanges across the globe in different time zones and some news breaks that affects the companies shares. Could someone short/long or make a play with their shares off of the good/bad news before the market started trading in another time zone?

I very much doubt that you would be able to do this at all if effectively. I don't trade in futures, (i.e. shorts and long sales) but I would be surprised if you could make a short sale purchase for a period covering a few hours.

 

[jimotis4heisman]

So the Japanese government in hypothetical scenario goes Yukos on Toyota, can I make some money off of this happening a different time zone before it would a market Toyota is in?

this is what i was referring to, the reality is you dont have the money to make money on the deal. with the expenses and what not involved. now if you had millions you could make large sums of money on fractions.

I very much doubt that you would be able to do this at all if effectively. I don't trade in futures, (i.e. shorts and long sales) but I would be surprised if you could make a short sale purchase for a period covering a few hours.

also dont forget that currencies are involved. think of it this way since 2001 the us greenback has lost about 40% of its value. what kind of impact does this have if a stock is traded on two markets.

see how this can get really complicated?

factor in longs shorts, other risk options and many other things and these things get highly complicated. like i said before the basic way for companies to decide is is cost<benies

im not going to give any stock or investment advice. i will say in markets their is a lot to be made and a lot of money to be lost...

 

[DaytonBuck]

So other than maybe some tax implications would be my deciding factor whether to invest in Toyota in Japan or in America?

 

[Buckeye Buh Nim]

So other than maybe some tax implications would be my deciding factor whether to invest in Toyota in Japan or in America?

Lots of reasons.

Taxes-
I don't know if Toyota issues dividends, but if they do, then for Japanese issues, the dividends are taxed by Japan at Japanese rates, which are much higher.

You get a credit for this on your taxes, but it goes away if you have to use the alternative minimum tax.

Oddly enough the cap gains from this type of purchase are US cap gains taxed at US (read forgiving) rates.

Complexity-
You have to check with your broker to see if you can do this or if you have to open an account at a trading house in the foreign country. (My guess is you don't, but your broker has to be able to purchase on foreign exchanges and I don't know what this entails)

Value of money-
As JimOtis notes- The dollar is weakening. translating into foreign funds will either help you or hurt you.

Example:
Lets say you buy 100 shares of Toyota on the foreign exchange for 100,000 yen. (1,000 yen per share) At the current rate the cost to you is- 991.03. (note this is not based on the actual value of Toyota on the Nippon)
101 yen = approx 1 dollar.

Now you sell a year down the line.
The stock is worth 1,100 yen per share, but the dollar has weakened by 20% so now 80 yen = 1 dollar. Here is what you have-

(100 shares x 1,100 yps )/ 80 ypd = 1,375 US or a pretty good gain.

You have just benefited by holding your $$ in an illiquid form in a Japanese market.

Now lets say that the dollar strengthens by 20% so 120 Yen = 1 dollare. You have
(100 shares x 1,100 yps )/ 120 ypd = 917 US or a loss despite the gain on the dollar.

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Now if you have the resources you can hedge your bet by investing in the futures of the foreign currency. (just one of many types of hedge funds)

Hope this helps...

 

[Taosman]

Way too complex a transaction. Making it even more dangerous.
If your interested in "trades" versus "investments". Buy Jim Kramer's books and watch his show.(I do every day!) He's on twice a day(repeat of earlier show) so you can catch him on CNBC in the evening. Even if you don't do trades, you can learn a lot. Mad Money.