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- Manlobbi
Investment Strategies / Non-US Stocks
No. of Recommendations: 1
I thought this may a good place to post this question as UK stocks have been discussed here due to the devaluation of the dollar.
There's now alot of discussion about the pound devaluing due to the UKs poor fiscal position and will do so either due to lack of confidence in the bond market (budget in November) or because they'll have to print money and inflate obligations away.
Currency is not something I usually spend too much time thinking about as I just want to buy decent companies and sit on my hands, however, also being aware of the overvaluation of the US market and the fact I'd have to bring funds back home into £'s if sold im thinking im better off sitting out the next 6 months fully invested.
Im 35% Alphabet 50% Chinese ADRs and HK (all doing nicely) recently remaining 15% is smaller US/UK positions.
As Munger says sometimes its best "to do nothing"
No. of Recommendations: 0
Correction; currently..
30% Alphabet 10% Nike 10% Oxy 40% China ADR/HK, 10% smaller US/UK positions.
No. of Recommendations: 5
Just some general rules of thumb on that general subject:
In terms of the currency exposure of your holdings, ignore where the company is incorporated and where it is listed. What matters more than anything is the geographic distribution of their revenues.
The secondary importance is the geographic (currency) distribution of their expenses. A firm that is mostly an importer/retailer will be in trouble if their home currency falls, and have windfall profits if it rises. A firm that is mostly make-locally-and-export will have the reverse situation.
But it's important to make the distinction between actual changes in profitability for those unbalanced firms, and apparent changes in profitability due to accounting in a single currency. For example, consider a multinational a firm with fairly balanced revenue and expense exposure to currencies. They have factories in the big countries they mostly sell in. Now imagine the currency where they are incorporated falls. Their reported profits seem to go up because their "foreign" income has risen measured in shrinking local currency units, but they didn't really. It's illusory.
Jim
No. of Recommendations: 0
> Chinese ADRs and HK
Please consider sharing them? I apologize if you already have and I've missed or forgotten.
No. of Recommendations: 2
Sure
Largest to smallest
Tencent hk, JD adr, Alibaba hk, Bidu adr, pdd adr.
