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Yes it was a bit in jest. But the same amount they save as price goes up, they lose when the prices go down. And yes stability is good, but it's not as big of
by brianwawok 9y ago
Yes it was a bit in jest. But the same amount they save as price goes up, they lose when the prices go down. And yes stability is good, but it's not as big of a deal as ppl make it out to be
- Retric 9y agoHedging can be a net win. A simple example suppose if price of commodity increases by x your company fails and that has say a 10% chance of happening. If you usually profit 10 billion per year and you can hedge for say 1 billion per year then money wise it seems like a break even. However, failure costs not just this years profits, but every year after that. So, your expected profit over the next 10 years increases even if the hedge does not save you any money over that same 10 years.
- dude_no_come_on 9y ago"A bit in jest"? You made a strong and easily falsified statement. Why is it so many people on this message board are incapable of admitting they're wrong?