Non-Relevance of ETF Quotation Currency

Investing / Others
9

Ok, you want to talk about manners on the forum?

  1. You did not present yourself. I do not even know how you could have missed this thread because it is the biggest on the forum.

  2. In your very first post, you manage to flood the forum with a question that has already been answered here, here, here, and here, as well as here. And, oh, did I mention here? So clearly you did not take time to do a forum search before asking. You will note that Hedgehog always take the time to answer the same questions. Maybe he was just a little bit tired of people like you profiting from his time. And by the way, your quoting of him is accurate, this question pops up so often it starts getting annoying.

  3. Hedgehog’s writings might be colorful, but at least he never called anyone an “A** h***” on the forum. You managed to do that in your second post.

  4. Hedgehog is easily in the top 3 of knowledge contributors on the forum, both in term of usefulness and accuracy. Your links on justETF and investopedia are surely correct, but they are irrelevant at best (and I will explain why below), and confusing at worst (because they make people focus on the wrong things).

  5. You managed to perform 4. “for education sake”. Danke vielmal, Herr Professor.

  6. When people try to tell you that instead of the quotation currency, you should focus on earnings and how they are measured, you belittle your interlocutor by insinuating that their little knowledge comes from scam videos on youtube.

All of this in your first three messages.
You won’t be surprised by the cold reception.

Now back to the topic, once and for all. Let’s take your example with the USD fund that went from 150 USD to 300 USD, and the fluctuations of USD vs EUR.
First, let me say that the only case where your example matters is for bonds and financial derivatives because they are financial contracts with predetermined and agreed cash flows. Stocks, on the other hand, are ownership claims on the future earnings of a business, and I will focus on them since it is the main topic of this forum.

You focus on the price of the fund going from 150 USD to 300 USD (i.e, the price of the piece of paper), without asking why it evolved this way.

  1. Maybe earnings doubled and USD remained stable, and in this case you are indeed twice richer, notwithstanding the currency in which your wealth is expressed.
  2. Maybe earnings stayed stable and USD lost twice its value, and in this case the business is mediocre, and you don’t deserve to be richer, whatever the currency.
  3. More probably it is a mix of 1. and 2.

For me asking which quotation currency is better is like asking if it is more relevant to measure my height in inches or centimeters. Heck, we could even create complicated measure systems which would change everyday like currencies ( one day 1 inch = 2.54 cm, then afterward 1 inch = 3.18 cm, then 1.76 cm, you get the idea), but at the end of the day, i would still be tall the same.

For stocks, it is the same: you own a business, and it does not matter if you measure its performance in USD, EUR or seashells, at the end of the day it is the business performance that matters, not the currency of the stock exchange it is listed on.

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