guess who?, page-36

Precisely my point thanks konsjo

Bluntly put, hedging will not cut it if the USD falls drastically, and I think it is on the cards. Which is why I'd rather we were not paid in USD full stop.

A drastic fall in the USD and IMO the entire paradigm re hedging will shift, and the shift will be seismic. Hedging helps with fiddling around the margins but there are limits to it's effectiveness as a strategy. The future of the USD is DOWN IMO and I don't want to be caught by it.

ADO management have been strategic by taking on board the mistakes made by other bios and have protections in place against various threats eg. hostile takeover, spreading yourself too thin, etc. But those are rear vision issues.

There is a time and a place for discussing these things and the message can get misunderstood or submerged. If they are busy right now, I am happy to let the issue sit, but it is an entirely appropriate issue IMO to raise at an AGM or in conversation informally when they are not under the pump. Also I want to ventilate the matter so others can consider the implications and take it up as appropriate.

Bluntly put, IMO we cannot just assume business as usual for the USD. Things are going to turn on their heads at some point for the US IMO, but I'm not sure when. Contracts have a long life. Currency is a much more critical issue IMO than previously in contracts.

Already China is executing contracts in the Renminbi rather than the USD. They are also buying gold against US treasury bonds they hold. This is a trend IMO, and not a blip. The world is interdependent and that's why they won't let the US fail, but they won't hurt themselves doing it either. (As you know the Renmimbi has been artificially pegged low against the USD and this has been a huge source of dissention in US/China relations. However China has sustained US growth by supplying credit and allowing the US to spend on Chinese exports to the US. Now China is recalibrating and focussing on developing a consumer economy domestically. The US by QE is flush with money and that will have an uneven effect.)

ADO is a massive opportunity but I also take seriously what could go wrong. This includes macro events. There were plenty of signals before the GFC but few read them correctly. This is a similar situation IMO.

The USD decline is not a matter of if, it is a matter of when, and I'm not talking 10% drop here. The massive injection of funds with the various QEs and the size of the US debt mandate that the USD will drop.

I have taken a large position with this stock because of macro trends firstly. I wanted a stock that was recession-proof and a dividend payer in the future. I also wanted to support Australian innovation. Then I drilled down to this one (with a heads-up from wormy). I always look at macro trends first, and later keep an eye on them.

Currently the USD has been shored up by the EC crisis, but that surely does not address the fundamentals of the US fiscal cliff, nor the fact that there is a rush to the bottom with currencies, to facilitate a competitive export advantage as they trade their way out of trouble.

To me these are issues that strategically it would be appropriate for ADO to be on the front foot with.

DV.

PS I'm not saying I have all the answers by a long stretch, and I'm not a currency expert, but I'll be a lot happier if the issues are being worked through right now. Not after contracts have been signed.