# 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

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A #story from #Thiruvilayadal puranam-one of divine leelas of Bhagwan Shiva

#threadseries #Madurai

Story 16- it is about how Bhagwan Shiva explained the meaning of Vedas to the Rishis.

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Once there was a great deluge,everything in the world was destroyed.All lifeforms that existed got perished.Afterwards ,due to Bhagwan Shiva creation started.Then from Bhagwan Shiv ji's mouth-birth of ЁЯХЙ OM- Pranavam happened.From Pranavam,4 vedas appeared. Rishis learned them.

Many Rishis in Naimisharanya learned Vedas&recited them but they didn't understand the meaning&essence of Vedas. They were worried as they couldn't find any guru who can teach them the meaning of Vedas.That time,Rishi Arabhatar visited them.Rishis told him about need their worry.

Rishi Arabhatar told them that Bhagwan Shiva has given Vedas &he would be grateful enough to teach the meaning as well.But for that rishis have to rigorous penance at a sacred place.Also told them to go to Sundareswarar temple in Madurai to do tapas in front of Dakshinamurthy.

Assured them that Dakshinamurthy himself will come & teach them.Rishis proceeded to Madurai & started their tapas in front of Dakshinamurthy sannidhi for almost a year starting from Karthigai month pournami to next year Karthigai month pournami following all rituals..annadan