Marc,
Currency exchange surely affects company's revenue, especially
big international ones, such as IBM, Coca Cola, HP, etc.
50% of Apple's revenue was derived from foreign countries,
hence the rates will heavily impact on its revenue. When you
said "each company hedges like mad...", I certainly know you
don't understand what the hedging strategy is. The major
purpose of hedging policy is to avoid further loss during the
currency swings, so the company's financial manager sets up
a bottom rate. When the rate is hit, the foreign currency
will be automatically converted into dollars. Then, he/she
will set next "hitting" rate. It will apply on both directions.
The hedging strategy can also apply on your personal investment.
If you buy 500 share of Apple, then buy another 50 contracts of Put,
then it matches the criteria of hedging method.
During the quarter report season, have you ever heard those companies
talking about the impact from the exchange rate, from CNBC, CNN etc.?
The rates are so important that big companies like GM, IBM, Ford, Coca
Cola's CEOs often encourage U.S. Center Bank to stablize if not lower
U.S. dollar value.
Well, still, the current trend of decreasing U.S. dollar value will
benefit to Apple no matter how you calculate and convert to U.S.
dollars.
Phil |
