Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: jeffbas who wrote (17068)	5/14/2003 3:53:27 PM
From: Jurgis Bekepuris	Read Replies (2) \| Respond to of 78525

Jeffrey, OK, let's rephrase my claim: "If a company A has competitors that compete on price with it and the price difference between products of A and its competitors depends strongly on some currency exchange rate, one should not invest in company A". Let's disect it. First, if A does not have such competitors, we don't care. Well, maybe we still care, since buyers may not buy A's products if it builds its products in one currency zone and sells in another, but maybe not. There are lot of complications here: most of companies don't manufacture everything in one currency zone, most of them do not pay for components in one currency zone, most of them hedge currency risks, most of them sell in multiple currency zones, etc ad infinitum. Overall, NTZ is probably the closest one gets to "pure example" of one currency zone company in terms of manufacturing (not selling). BA and Aerobus may be another example. DCX, I think is totally nonexample, since it has such wide geographic market and production distribution. Second, we can't really buy A when price difference (and currency exchange rate) is dropping and sell when the price difference is rising - this is just currency speculation, we assume that the exchange rate will stay the same or continue in the same direction in the future. Also it may be a short term move and investing is long term (at least for me). This is what I claimed before. So then we have to avoid A totally. I still believe that most of companies are not in the situation of company A, so I will continue to ignore currency exchange rates. Take care Jurgis - maybe we should avoid NTZ. :-)