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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Investor-ex! who wrote (8702)	12/21/1997 9:53:00 PM
From: Dan Ross	Respond to of 9285

It isn't so much derivative defaults that is the risk.....with these large international firms they have transactional and operational exposures in certain SE Asia countries....They are more prone to downfalls IMHO....However, the derivatives they undertake are normally to hedge against economic downturns......NOT SPECULATION......Speculation such as Orange County etc doesn't occur as frequently now since derivatives have become a BAD NAME...many boards are very apprehensive to fancy hedging programs too..... One final point is that the countries that have been affected are not highly liquid currency markets....therefore hedging costs more on average if undertaken...most companies probably weren't properly hedged when certain currencies tanked.....QCOM stated that they felt the Won was exotic and hence didn't hedge against it....What do they use then, the Yen??.....S Korea is the largest developed market for CDMA products currently ....yet QCOM didn't hedge against the WON....I have a feeling we will see a HUGE number of foreign currency woes since most companies weren't hedged with "exotic" currencies....these are the ones that fell tremendously.....not developed markets such as Japan... Take care Dan Ross