Author Topic: constant currency  (Read 1401 times)

PatientCheetah

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constant currency
« on: April 09, 2014, 08:31:22 AM »
if a foreign company is growing steadily in terms of its local currency, most of the earnings volatility is due to exchange rate translation. Should we value the company in its local currency and then take a mean-reversion approach to currency translation, making the bet that its exchange rate will revert to long term average? Are there other sensible approaches?
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thefatbaboon

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Re: constant currency
« Reply #1 on: April 09, 2014, 08:41:06 AM »
My personal view is that it depends on the currency.  Would you say the bolivar is going to be mean reverting against the dollar?