The most fundamental determining fact in connection with organization is the meeting of uncertainty. The responsible decisions in organized economic life are price decisions; others can be reduced to routineFrank Knight, "Risk, Uncertainty and Profit" Over the years I’d written many articles suggesting that price forecasting based on market fundamentals is a waste of time … Continue reading Trend following is the only valid answer to the problem of uncertainty
Lately I got into arguments about the proper role of hedging with some individuslas who, I thought, should know better. Their belief, essentially, is that operative businesses - mining firms, oil&gas producers, airlines... - should always hedge their price exposure and focus on generating value on their operations. In other words, ignore the price of … Continue reading Why hedging is key!