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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: 16bit who wrote (10096)	3/2/2000 4:11:00 PM
From: Zach E.	Read Replies (2) \| Respond to of 78666

Let's say you buy Juan's Repair Shop in Mexico. The purchase price is 1,000 pesos. The exchange rate is 25 pesos to the dollar. Juan's business would cost you $250. Wouldn't the price be $40 if the exchange rate is 25 pesos per dollar? If the next day the peso is devalued to 20 pesos to the dollar then you have lost $50 in equity. A change in the exchange rate from 25 to 20 pesos per dollar would be an increase in the value of the peso relative to the dollar, and the business would now be worth $50, unless I am missing something. Regards, Zach