HOW FINANCE IS HARD
Wheat is trading below where it was when the Ukraine war started.
Never fall for first order narratives.
{#FatTony made his fortune shorting oil after the First Gulf War.}
Wheat is trading below where it was when the Ukraine war started.
Never fall for first order narratives.
{#FatTony made his fortune shorting oil after the First Gulf War.}
2) The mechanism: overadjustment to shortages. $$ to produce substitutes elsewhere, plus adaptation away from expensive product.
1973 oil shock led to slow adaptation [speed limits, smaller cars] => 1980s glut; today things are much, much faster.
Now watch microchips.
1973 oil shock led to slow adaptation [speed limits, smaller cars] => 1980s glut; today things are much, much faster.
Now watch microchips.
4) A logical error is to focus on production costs. The problem can be mostly logistics. China dependence = Shipping.
An extreme example: a tomato at Cosco selling for $1 costs 7-18c at the farm, 1-3% end margin, so between 80-90% transportation, warehousing, perishability, etc.
An extreme example: a tomato at Cosco selling for $1 costs 7-18c at the farm, 1-3% end margin, so between 80-90% transportation, warehousing, perishability, etc.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
