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Currencies Rocking Stocks

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    FiREapps CEO Wolfgang Koester on investing and how currency swaps are impacting stocks.

  • Duration 3:51
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Oh and heading into the second quarter of 2012 investor should be asking.

What companies are the most prepared for currency.

Headwinds you didn't think about that then -- -- that's helped some of the largest companies in the United States hedge against volatile currencies and the fire out chairman says bigger isn't always better -- -- costs.

Business explosive -- and Custer chairman and CEO.

A fire -- -- -- talk about this because when big companies like Alcoa.

Escaped.

Currency hedges -- -- a good way and other companies didn't do so well in most of the clients that you have to work weapon how to correct.

Yes so what happens is sometimes you have currencies depending on what the market -- for the quarter helped cause this quarter actually got a Mulligan on this thing didn't didn't impact him very much.

Other companies word they weren't focused as much from -- -- dollar as we are probably gonna do this quarter.

Such as Aussie dollar dollar Brazil and re I.

Are being impacted negatively by that but the Rio Tinto or you know I mean I again have resigned -- in trying currency can hurt them.

But also the Euro and the dollar could -- -- as well depending on who they are and that's when I look at.

OK so we've been saying the dollar strengthening our other companies that you're concerned about right now because they may not be prepared.

For what could happen in this current quarter with regards to currency swap CF so a -- -- looking at companies in general you could look at some large companies that seem very sophisticated like to -- more do you think.

They got to get this under control they must have this under control.

But in reality is they're not that great and understanding their exposure and that's what this is all about it isn't just getting to the hedges as.

Will all my currency exposed around the world you -- more probably it's 3400 currency pairs around the world how they understand what that exposure risk.

Interestingly enough you may have smaller companies like a cool bands for example go in there and also -- say.

I understand that I may only have sixty currency pairs.

But I really understand that -- leveraging technology do that that's what we hope and a foot generally prepared like is Google prepared in your opinion right now who have very -- not to disclose that they are customer they've been for years.

I know.

Figure out very good.

They understand technology and they know how to look -- at the end of there right so they really understood that you think about sophisticated companies like an eccentric.

Very good at it.

-- we talked about earlier about the company like the Plantronics.

Not so -- still very sophisticated really understand Plantronics in makes air bases with the right products such -- -- -- -- complaining about frankly in the commercial -- but that -- -- they actually even on the smaller company they're doing it right -- what they're in the they're doing and they're really understanding -- -- leveraging technology by the cloud today.

To understand what their exposure saw analyze them and get to optimal decisions.

To mitigate that risk sort of things that that that happened with regard to currencies that was kind of surprising was the Chinese yuan actually -- second quarter has a whole debate now about Chinese currency and I'm gonna go into that but.

That could -- investments as buyers.

Yeah absolutely so what's really -- about China and something to watch in the future -- they've been very -- obviously to the dollar.

In trading in a very narrow range will this quarter they really expand the debt trading range.

Which now gives it more opportunity go up and down with more questions about what the Chinese currency is doing people are starting to say.

Hey it's not just always gonna go up if it goes down -- -- impacted CF companies.

Who are actually having -- revenues from abroad outside.

Extending -- -- isn't that we just don't think about -- but if you're -- you think you're safe investing in these multinationals US multinationals and because of their exposure abroad.

But they can be hurt and it's kind of the lesson the take away her think -- about exactly so -- Teradata and you're expecting revenues.

Out of China now or you're an Emerson Electric.

And also in the currency comes down they probably haven't been doing much about it.

That could seriously hurt the top line just to name of the company fire -- -- and -- great to have you on the show have to thank you -- Well a.

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