Forum Archive Index - December 2001

[donkeyboy <donkeyb1@excite.com>]

well veiwpoint

I dont believe SAN stuffed up - investors bought into a well artiticulated
fx policy when they purchased the stock - Because that policy was passive,
it would win sometimes and lose sometimes on the FX. The loss was a
consequence of that policy and when/if the currency turns around then a gain
would be made. 

Critics such as Gaynor, Hall and yourself have all been very quick to
critise, but without fail, all critics have been too gutless to suggest an
alternative course of action that they should have taken. 

The analysts I speak to also have difficulty suggesting an alternative
forward cover policy - but they also dont bag something when they can't
think of
a better alternative.

as for your valuation of the fx losses at $2-$3 per share and comment there
is no end in sight - SAN would have to be making similar fx losses every
year - which means that the kiwi dollar would have to keep depreciating at
20% per year every year for ever - ah well perhaps not.  Somehow I doubt any
institutional/professional investors would agree with you on that scenario.

As for your point that they are taking a bet on against the long slide of
the NZD (depends on your veiw of long term) - demonstrates that you still
dont grasp the difference between passive and active management. 

You want the coy to actively manage currency and they dont.


cheerio





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