CompuServe Messages

Ethan… No one really knew the dollar WOULD drop. If everyone KNEW that the dollar would drop, it wouldnt have risen in the first place. I work on wall street, and everyone I knew thought the dollar would go through the roof. Commodore deals in a dozen or more currencies. It has been their practice to repatriate all currencies to dollars in the past. They do SOME currency hedging, but not enough. I think the recent jolt will make them more serious about hedging their currency risk. One problem with currency hedging tho…If the dollar were to STAY strong, hedging only postpones the day of reconing. On the other side of the coin, if the US economy does enter recession, Commodore will feel barely a blip, while I would suspect Compaq and Apple would be hurt much more. As for the stock price…I have followed the stock for years, and I think at 13, its a great buy. A price of 13 really discounts more bad news than has come out. If you check P/E ratios, Commodore's is about 5 now, perhaps will be 7 after the June quarters earnings are released. Compaqs is 12 and apples is about 10. Earnings would have to fall 30-50% in order to eliminate the wide disparity in valuation levels. On the other hand, it may take 3-6 months, or a jolt of good news for the stock to go back up to previous levels.