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Koester: Watch China

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  • Description

    Fireapps CEO Wolfgang Koester weighs in on currency volatility.

  • Duration 4:06
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This transcript is automatically generated

But the articles adorable so far more than 90% of S&P 500 companies.

Have reported quarterly earnings so how's everybody doing well yesterday's close nearly 60%.

Missed on revenue.

And more than a quarter missed on EPS but when they miss on revenue means and offering him as much -- sales and things like that's what's behind the numbers.

Joining me now from Phoenix in a box this is exclusive -- thank -- fire -- chairman and CEO.

And Wolfgang I want to call you the currency canary in a coal mine because.

You spot problems with companies before they come out with their numbers and you invest accordingly.

Due to what you see and and did you see this coming.

Well we actually saw it coming though our technology firm actually focuses more on helping companies understand it and then manage it properly but we absolutely saw this coming.

And one of the reasons that it actually surprised the market was that a lot of these analysts.

Focused on Euro dollar only instance that wasn't such a big story only about 15% of analysts actually focused on -- where the average -- -- about 40%.

And so what actually ended up happening Brazil and we Indian rupee rubles all these other currencies.

Moved a lot more than Euro dollar it surprised everybody consequently you have large losses on -- top line due to foreign exchange.

OK so what you're saying is that because they were so worried and they just looked at the obvious which was -- there -- -- -- types of troubles in the eurozone.

They missed a side window picture which ended up being a bigger deal.

Absolutely they're just so many more currencies that these corporations are being impacted by its not about the Euro vs the dollar -- -- Look at what's gonna happen in China same story there that's -- on -- that's gonna add even more.

Uncertainty to companies that are not managing this risk process so you're saying the Chinese you want as the next big story that people need to look out for why.

Absolutely you just saw the election coming out on Thursday morning to maintain areas there of one.

You have a more reactive more nimble government taking their leadership from ten -- -- seven.

That was significantly.

Second of -- There was a question is are going to be economic reform is they're gonna political reform it's going to be social reform the seven people that they -- elected could.

-- are gonna -- -- focusing on the economic reform.

And that translates into we're gonna focus on the economy we're gonna focus on -- pegging the currency.

Differ having a wider band -- for more uncertainty of the currency vs Z.

They're Chinese currency vs any other currency and I'm here.

Why people's eyes should not glaze over when wolf -- talking because a 199.

Companies in the S&P 500 cited currency issues.

This time around vs a year ago when only 69%.

Of companies said the currency volatility was a problem so.

Which companies were most hurt by currencies which ones are most -- -- -- -- these 'cause I'd rather spend a -- and find out we think is going to be affected this current quarter.

Saudi is still see companies not -- proper like -- Caterpillar.

And eBay and even an Exxon more law -- the company wherever they so Smart they all dollar base known not the fact.

Lots of currencies right through those companies.

They're not managing to the levels that you can do today you've got companies like an -- -- a Google even companies that may not be mainstream like -- Itron.

They are.

Very well managing this thing they're prepared and whether Chinese currency comes or not isn't gonna impact them at all so what these investors -- -- investors need to look at is one.

Look at the earnings calls and look at what the CEOs and CFOs saying about their earnings until this look at piano and the quarterly reports ten q.'s.

And it to -- least -- -- annual current the quarterly reports.

In the quarterly you wanna look at -- item ten three and in that and really wanna look at item seven a pretty descriptive.

Three and seven say okay we're gonna put that on the FaceBook page FaceBook dot com slash -- claimants to the people can look for this and figure it out.

Wolfgang you are always very educational to our investor viewers thank you so much for joining us.

My pleasure thanks for having good to see you all right when we come back much more.

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