GREY:GRFJF - Post by User
Post by
mc15000on Mar 20, 2008 11:52am
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Post# 14754068
the problem with hedges...
the problem with hedges...the problem with hedges is that, in the market:
1) when the spot price goes up, the company that hedges gets negative because they can't fully participate in the run up
2) when the spot price goes down, the copmany that hedges gets sold with the entire sector, regardless of their hedging.
It a no win in the market - it took Barrick 20 years to learn this and stop their hedging activities. I understand why Wesstern did it, it provides some nice support and risk control and makes total business sense. But, it hurts investors.
Just one mans opinion.