Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: smolejv@gmx.net who wrote (44967)	1/19/2004 10:49:24 PM
From: LLCF	Read Replies (1) of 74559

Exactly, so the 'most hedged' German auto maker is hedged for 3.5 years. The point is, ANY company boasting that it 'hedges' it's currency risk is really simply smoothing things out near term. In the long run you still have a company with the same structure you always had. As far as investors are concerned, the long term value of the company changes little. Example: Let's assume some $/E move wiped out all of theose companies business over some period. In the end, they'd all be wiped out except each one would have a little lump of cash from the hedges... big deal. In reality of course they'd piss that away as well waiting for things to change. DAK

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