January 2017 Data Update 3: Cracking the Currency Code
aswathdamodaran.substack.com
There was a time in the not so distant past, where analysts could do their analysis in their local currencies and care little or not at all about foreign currencies, how they moved and why. This was particularly true for US analysts in the last half of the last century, where the US dollar was the unchallenged global currency and the US economy bestrode the world. Those days are behind us and it is almost impossible to do valuations or corporate financial analysis without understanding how to deal with currencies correctly. Since the perils of misplaying currencies can be catastrophic, I decided to spend this post getting up to speed on the basics of how currency choices play out in valuation and where the numbers stand at the start of 2017.
January 2017 Data Update 3: Cracking the Currency Code
January 2017 Data Update 3: Cracking the…
January 2017 Data Update 3: Cracking the Currency Code
There was a time in the not so distant past, where analysts could do their analysis in their local currencies and care little or not at all about foreign currencies, how they moved and why. This was particularly true for US analysts in the last half of the last century, where the US dollar was the unchallenged global currency and the US economy bestrode the world. Those days are behind us and it is almost impossible to do valuations or corporate financial analysis without understanding how to deal with currencies correctly. Since the perils of misplaying currencies can be catastrophic, I decided to spend this post getting up to speed on the basics of how currency choices play out in valuation and where the numbers stand at the start of 2017.