this post was submitted on 13 Nov 2025
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[โ€“] LodeMike@lemmy.today 3 points 1 week ago (1 children)

No it doesn't.

Stocks are a measure of how much investors think the company can profit. If the value of the euro drops a EU stock won't suddenly shoot up to account for the change in exchange rate from EUR to USD. Same thing with U.S. stocks.

In fact the exchange value of the dollar is going way down so it's actually more reasonable to just use percentage change in listed currency.

[โ€“] Yeller_king@reddthat.com 2 points 1 week ago (1 children)

You canโ€™t compare countries in different currencies. Picking one numeraire is what makes it apples-to-apples, and FX is part of the real return.

[โ€“] LodeMike@lemmy.today 2 points 1 week ago (1 children)

Again. No.

If you used EUR for this comparison everything would be -10% or something

[โ€“] Yeller_king@reddthat.com 2 points 1 week ago (1 children)

When you compare different countries, you have to look at returns in one currency. Otherwise the numbers arenโ€™t comparable. FX moves are just part of the real return from a global perspective.

Put another way, suppose an American buys an Argentinian asset and then Argentina experiences 1000% inflation but the price of the asset goes up 900%. Are you telling me that you think the Argentinian stock market is doing great? The point of using the same unit across countries is to avoid this issue.

[โ€“] tomi000@lemmy.world 1 points 1 week ago (1 children)

Otherwise the numbers arenโ€™t comparable.

The statistic is comparing percentages, those dont have a currency.

Aa an exaggerated example: If you make a statistic about how much trees have grown in one year and they doubled in size everywhere, it doesnt matter if you measure in cm or inches. But if during that time someone redefines 1inch = 5cm and you only measure in inches, suddenly trees in metric countries didnt grow at all. Weird.

[โ€“] Yeller_king@reddthat.com 1 points 1 week ago

The inch/cm analogy only works if the conversion rate is fixed. Currencies arenโ€™t like that. Their conversion rates change over time. That changing conversion is part of the return when you compare countries. Thatโ€™s why you need to put everything in one currency first, then calculate the percent change.

Your analogy actually proves my point: if the โ€˜inchโ€™ changes relative to the cm over time, then youโ€™d have to convert all measurements to one unit before comparing how fast trees grow, even though the percent growth itself is unit-free.