I do not have to know the mechanics of how a company engages in bad or unmoral conduct to understand=know that they are doing as such.
Is this taken from the GATA mantra, or have you finally began to speak for yourself. How do you know what is bad or unmoral{immoral?}, unless you have a frame of reference to judge such. In the eyes of one, nuclear weapons are moral, whereas in the eyes of others such weapons are dispictable. So without an understanding of derivatives, how can you judge those companies that use such. Ted Butler and you, I suspect lack the understanding to form a basis for such analysis. And this truly is what frauds and lies are based on.
A lot has been said about Ashanti and Cambiour as of late. But rest assured, they like LTCM before them were NOT hedging. They were SPECULATING. Often speculations pays off, but sometimes it can blow up in your face. This is the nature of what is called risk. Do you know what risk is? I've asked that question so many times on this thread and few have any clue.
Gold Producers-Hedgers risk a fixed amount of their assets, which are proven reserves, against whats called reward.
Risk n.:amount covered by insurance, to chance.
Reward n.:a sum of money offered for the recovery of articles or assistance in any form; retribution.
A true hedger never goes beyond his risk tolerances. LTCM, Ashanti & Cambior were not hedgers. Is Barrick and Placer Dome? Newmont mining bought many put options in the futures markets weeks ago. Is that hedging? Why do you need to know about hedging, if you plan to only invest in a gold stock. Simple. Because a lack of education on your part, should not become ignorance of advice, opinions, and lies. But this is the route that Ted Butler, Bill Murphy {GATA}, and many of late on the GPM thread have taken. Question about a hedge should always be asked. And if you read the information the companies supply you will see that the pertinent data is there. How much is hedged, what the hedged prices are, what the premium is, and whether they can extend the terms. Cambior never supplied that, nor Ashanti. LTCM was a private company.
Hutch
PS: Maybe you should review what a margined account really is. Cause if you use one, you are investing in a derivative. After all the margin account gains it's value based on the equities inside the account. |
