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Then how do you account for foreign exchange differences over time, when you're considering investing in a foreign company? Surely you have to consider the differences over time in the exchange rate?

As a US investor, what I care about is return measured in US Dollars. A foreign company might be doing a bang-up job over time when measured in its own currency; if that currency is sliding with respect to the Dollar, however, the company's results won't be so good for me (a US investor).

I don't worry about the foreign exchange differences over time. One thing to keep in mind is that unlike your dubloon example, I'm not looking at investing in foreign companies that are based in places with highly volatile currencies. I don't think you'll find any Makers based in South America or Asia. Most of Europe is moving to the EURO, that makes things pretty stable. I'd rather just use local currency than try and do an arbitrary conversion to dollars.

One other thing to keep in mind is that companies like Nokia do a lot of business in the US, those $US sales are translated to EUROS, which created an exchange difference, now you're translating them back to dollars and if you follow the rules, you end up with another exchange difference. I don't see the need to be that US centric. I'm more concerned with seeing the differences between GAAP accounting and International accounting (which Nokia includes in its annual report). For me looking at the same accounting standards is much more material than looking at $US vs. EUROs.

Is the RM strategy fundamentally inapplicable to foreign companies, unless their exchange rate versus the dollar is roughly the same during the two periods being compared (as it is with the Euro, in this case)?

For me yes, but only because I have yet to run across a company based in a country with a volatile currency that's anywhere near Maker status.

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