BC CRYPTO
Saved by @Mollyycolllinss

# 💹 The effect of Currency Exposure on Shareholders Equity 💹#

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 ‼️

 Keypoints 🗝️:

- 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. 🌎

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). 🇵🇰
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!
⬇️Here you go ⬇️

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 it🤫🤫
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! 🔥🔥

https://t.co/iKWBlzdrxM

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(Video version @ https://t.co/7zJCuKrpqx)

A thread. 👇


2/20 On a normal day outside a bull run, Bitcoin takes ~10 mins to transfer, at a cost of about $0.50. Any time network activity ramps up, those times and fees multiply. Bitcoin's Proof of Work system is painfully slow and can only handle 7 transactions per second.


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TRIANGLE MASTERCLASS - a thread.

what's the simplest, most effective method of trading a market that trends as hard as cryptocurrencies?

trendlines.

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i've been using triangles for as long as i can remember.

it seems dumb, and almost counter-intuitive to approach such a complex game like trading with such a simple approach like shapes...but maybe when markets start acting stupid its okay to dumb down our approach.

look, not all triangles are the same.

anybody can draw some lines on a chart any way they'd like. sometimes, we let our bias affect our charts rather than the other way around.

i personally have done this more times than i can count.

you see...triangles (and analysis as a whole) is not necessarily intended to make trading easier as much as it is to make trading simple.

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Lindy Effect 101

With Bitcoin's return to the spotlight, debates on its long-term viability are raging. Its proponents contend @nntaleb's Lindy Effect says the technology is here to stay.

But what is the "Lindy Effect" and how does it work?

Here's Lindy Effect 101!

👇👇👇


1/ First, a few definitions.

The Lindy Effect is a theory that the future life expectancy of specific non-perishable items, like a technology or idea, is proportional to their age.

Put simply, the longer it has already lasted, the higher the likelihood it will continue to last.

2/ The term "Lindy effect" is a reference to Lindy's, a New York deli frequented by comedians in the 1960s.

While author Albert Goldman used the term "Lindy's Law" in a 1964 article, it was mathematician Benoit Mandlebrot who moved the dialogue towards the current definition.


3/ In his book, entitled The Fractal Geometry of Nature, Mandlebrot commented that the more stage appearances a Lindy's comedian made, the more future appearances he could be predicted to make.

The longer he lasted, the longer he would continue to last.

4/ @nntaleb built upon Mandelbrot's work, formally coining the term "Lindy Effect" in his book, Antifragile.

He noted the Lindy Effect with books - the longer a book has been in print, the longer it is likely to survive.

With no natural upper bound, power laws come into play.
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Scathing comments on Crypto from Mr Rabi Shankar - Deputy Governor, RBI.

1) On crypto being treated as a currency:
"Currency always has an issuer, usually a trusted entity like the sovereign. Even when gold is used as a currency, the gold coins had to be issued by a sovereign.

Secondly, historically, a currency has always been either a commodity with intrinsic value or a debt instrument. Cryptocurrencies do not conform
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Currency needs trust, not everything that can be trusted is a currency. So even if technology (as
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They do not, and should not, automatically become a currency for the larger society "

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