# ЁЯТ╣ The effect of Currency Exposure on Shareholders Equity ЁЯТ╣#

When we invest, one important aspect to consider is our portfolio exposure to currencies. It is not important where the company is trading, but where and how is making business тА╝я╕П

Keypoints ЁЯЧЭя╕П:

- In which currency is the company getting paid?

- In which currency is the company paying their costs?

- Are they hedging?

- In which currency is their cash, investments & deposits?
I specially look at them in companies with business in LATAM, Africa or Asia. ЁЯМО

One of the checks you make is looking at the "Other comprehensive income".

I remember that I was very confused the first time I look into a company from a developing country (Pakistan). ЁЯЗ╡ЁЯЗ░
It was a software company (Really good ones in Pakistan) and they seemed to be doing pretty well (Positive Income) but the equity was just decreasing. WTF?

Reason: They were very exposed to Pakistan Rupee!
тмЗя╕ПHere you go тмЗя╕П

They were collecting most of their cash in Ruppes...
In most cases it is not a big deal, specially if we invest within Europe or North America or companies that hedge.

But as an advice please check "Other comprehensive income" or at least check if Income corresponds to the increase on Shareholders Equity
And careful with net cash!
Anyways, I am a curious person and for my investments I try to monitor my exposure to currencies. Specially since I buy worldwide and lately most in Asia

For example, for Winox Holdings I have created a coefficient model that forecast the Annual Gain/Loss due to currency effect
which is part of the Other comprehensive income.

For H1 2020 they report a loss of 13.9MHKD. My model estimates a gain of around 35MHKD for 2020 FY. so basically almost 50MHKD of gains which is 6% of the company market share.

Lets see in a month if I was right or not!
Anyways the exposure in Winox is pretty low. It doesnt matter much on the valuation but there are some others that I am following that it is mostly 20-25% of market cap. I am still doing some research on this side in microcaps because the share price doesnt seem to reflect itЁЯдлЁЯдл
You have the Winox investment thesis in this thread if you like to read it. One of my biggest positions by the way

Hope you like the currency thread/advice, cheers! ЁЯФеЁЯФе

https://t.co/iKWBlzdrxM

More from Crypto

Quick Thread on #Altcoins/ #Altseason

Step 1: $BTC has a huge correction. Every range starts with either a pump (or dump) and then follows with a dump (or pump). In this case, #Bitcoin pumped and is now pulling back. This is


Step 2: $BTC ranges big once it finds a bottom. This will allow it to reaccumulate for a big summer run in 2021. This is HEALTHY IMO.


Step 3: Once $BTC finds a bottom and starts to grind up again, I expect $ALTS to do very very well in both alt/usd and alt/btc pairs. ALTSZN is almost always characterized by strong alt/btc pairs moving- I've already accumulated most and have done my final buying today and more.

$BTC.D typically has a very nice time during this time of the year. I was off on December prediction bc I thought $BTC was going to pull back by then but oh well! #Altcoins will start their pumping time VERY soon now.


More information on what #Altseason is and $ALTS market
Back with another #FreeLoveFriday. Last time, we covered how Mastercoin/@Omni_Layer pioneered digital asset issuance on blockchains. Today, letтАЩs discuss @Chainlink and the vital role it plays in connecting blockchains to the real world.


I have said repeatedly that digital asset issuance is the killer application for blockchains. The next frontier is bringing real world assets to networks like @AvalancheAVAX, but we often face a significant problem:

Namely, how do you get data from the real world onto blockchains and into applications running on them? More critically, how do you achieve that securely and transparently in real-time? Smart contracts are tamper-proof, but they're only as reliable as their input data.

Enter ChainLink in September 2017, with a whitepaper outlining a vision for a decentralized network of тАЬoracles,тАЭ entities that inject facts from the external world into blockchains in a suitable format for smart contracts.

Until ChainLink, oracles were trusted and centralized. This is a huge problem for high-value assets and smart contracts. High value projects, such as @CelsiusNetwork, @synthetix_io, @Aaveaave and others depend critically on oracle data.

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