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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: zebra4o1 who wrote (109801)5/6/2011 10:08:14 AM
From: TH  Read Replies (1) of 110194
 
z,

<Don't really understand how a business like Tulving can deal with all this volatility. Do they keep all their physical inventory perfectly hedged at all times?>

You know, that is a good question and I've thought about it from time to time.

Tulving makes their coin on the exchange of metals for cash. Certainly drops of this size and larger means they are trapped with X amount of inventory from some price higher. But, inventory relative to annual volume is perhaps smaller than I estimate. Thus, with good inventory control, Tulving can survive a few big drops.

And let us not forget that EVERYTHING they bought over that past couple of years was at lower prices, thus greatly increasing the return for each transaction over the base amount from the difference between bid and ask.

Then again, I really don't know.

GT
TH
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