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Msg  23211 of 24327  at  1/21/2020 7:30:02 AM  by

Jerseyvinny


 In response to msg 23210 by  ed81
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Re: FDG

I don't remember who noted the flood effect but I did get one big lesson from it. Relatively small movements in commodity prices can profoundly effect profitability of the provider. For example: Say commodity X costs $90 to produce and sells for $100. That's a $10 profit. But if there's a price increase to $120, the profit increases to $30. That means a 20% increase in selling price brings a 300% profit increase. That's what made owning FDG so interesting at that time. Unfortunately, the amplification effect also works the same way but in the opposite direction for price decreases which is what makes commodity investing so treacherous. Ask anyone who owned SDRL. I miss Dividend Hunter.


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Msg # Subject Author Recs Date Posted
23213 Re: FDG ed81 0 1/21/2020 7:57:01 AM






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