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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (25354)	3/15/2004 8:58:34 AM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 60323

John, only the larger international companies using hedging on foreign currency transactions. Hedging is only successful when it involves much greater money flows than would be expected even in a company the size of SanDisk. Hedging also would not be a useful strategy for a U.S. company when the dollar value is falling against other currencies, but only if the reverse were true. It would take companies the size of GE, Caterpillar, or 3M to make hedging useful. Recent earnings reports from Caterpillar and 3M show how a falling dollar can benefit companies with large foreign sales. About half of the growth in earnings for Caterpillar and 3M in the 4th quarter of 2003 was attributable to foreign exchange currency gains. Art

To: John Carragher who wrote (25354)	3/15/2004 9:40:04 AM
From: chomolungma	Respond to of 60323

don't most international companies hedge currency to avoid impact of currency changes. Currency hedging can only do so much. You cannot hedge against the economic impact that adjustments in currency rates will have indefinitely. The real impact of currency changes will depend on which currency your costs and revenues are denominated versus those of your competitors. Ideally, you want your costs to be fixed in the depreciating currency and your revenue in the appreciating currency while your competitors are experiencing the opposite.