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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (48236)	10/23/2001 3:53:09 PM
From: Eric L	Respond to of 54805

Chaz, << General question...applies to ARMHY. Do you hold any reservations about investing in non-U.S. companies? >> That is a good question even though I'm not rabidly "Buy American", and my house is liberally appointed with electronics gear very little of which is made in USA, so I would be hypocritical if I would preach "Buy American" (exclusively). I can say, however, that I've never driven a business automobile (and never will) that wasn't made in the USA - perhaps a hangover from a dozen years living in Pittsburgh -and a deciding factor in purchasing an Outback for my wife recently was that it was manufactured in Indiana and outfitted with an audiophile stereo system manufactured in Binghamton, NY and tires out of Akron, OH (and fortunately a different version of "Wilderness" than the one that gained notoriety). That aside, I have held very few equities of companies headquartered outside the US. The glaring exception in my current portfolio is Nokia which trades in American Depository Receipts on NYSE and 5 other exchanges. With that said there are some obvious considerations (not necessarily disadvantages) that need to be taken into account. Nokia's earnings are stated in Euro's. No big deal, just a little currency conversion and most of the financial houses tracking make the conversion for you. Strength of the dollar against the Euro comes into play but this can work either way at any given time. Nokia files no 10Q or 10K, but it files a 20-F annually (using GAAP) with the SEC but this years was not available until 5 months after the Fiscal earnings were reported. Prior to this year NOK reported using IAS and it still makes an unaudited IAS statement available with its pro forma. Typically one has to go hunting for a 20-F (a mild PITB), but most worldwide companies or companies link them on their web site when available. Now ARMHY trades on NASDAQ so presumably files a 20-F but I have never looked to see if they report earnings in pound sterling (presumably) or Euro. I would certainly hunt up their last 20-F if I was seriously considering investing in them. I've noticed that not a lot of analysts follow ARMHY (as compared to let's say TXN or QCOM - or NOK for that matter) so that means it is a little more difficult to get visibility on it. I just looked at ARMHY's market cap (5.1 Bil). Our G&K consists of companies with market caps > $10 Billion. Personally I happen to think that we should not exclude companies with market caps < $10 Billion from our thinking, and I don't think we do. I've rambled a little here, but bottom line is that I would take into account where a company is headquartered, but for me foreign ownership, in and of itself is not a deterrent to investing in a company, but I wouldn't fill my port with same, and perhaps I'd do a little extra DD on a company headquartered outside the US and I don't think I would invest in one not listed here. I would take into account what the company contributed directly (by way of employment, advertising, etc.) to the American economy. - Eric -