Re: Investment Idea: Big Mac Index
IMHO the Economist index is always right on about the relative valuation of curriencies. However, they do not suggest they know when a correction will occur. So how you use this information is up to you. Anyone in international business has even more detailed information, what makes this index so neat is that is easy enough for anyone to understand.
My only use of it is to figure out what place is underpriced for vacation purposes and purchases on such trips. My son chose to go to China over Italy last year in part because of the currency valuations reflected in something like the Big Mac Index. For investing it is not as useful as you have to worry about more variables like local vs export markets, raw material costs as well as exchange rates.
Yakers, who loves reading The Economist for 27 years now, but not as much as kayaking...
Old men ought to be explorers