Does GM Hedge?

Why hasn’t GM ever hedged against Oil/Gasoline price increases?

Or do they, and we just never heard about it?

That question came up several years ago in a late night conversation, but I never followed up on it.  Airlines do it, many Oil companies  do it — so why not GM or Ford? Both companies have become so reliant on big SUVs, pickup trucks, and other energy inefficient vehicles, that they are so obviously subject to the vagaries of the Crude market.

I mentioned this vulnerability to oil’s pricing on Power Lunch about a year ago (Sell GM att $45 turned out to be a pretty good call), and had an interesting discussion with another guest in the green room about it.

But that’s now history, so lets make this propspective:  What other companies’ profits are vitally dependent on a commodity that could see big price increases? Can they hedge against a big move? Should they?

Consider: Intel & Silicon, Utilities and Natural Gas/Coal, Boeing and Aluminum, Coke and Sugar.

Use the comments section to suggest firms that should consider a hedge — but don’t.

Category: Commodities, Corporate Management, Earnings

A Better Sentiment Measure: DrKW’s Fear & Greed Index

Small World: On Saturday, I mentioned problems with Citibank’s Panic/Euphoria sentiment measure. Then, I discussed the work of James Montier of Dresdner Kleinwort Wasserstein (DrKW) yesterday, (Seven Sins of Fund Management). This was the first time I ever mentioned him. By coincidence, I read about a Fear/Greed indicator last night from the very same James…Read More

Category: Investing, Markets, Psychology

Weekend Linkfest (Nor’Easter Version)

Category: Weblogs

Guide to Winning Portfolios

Category: Investing

Seven Sins of Fund Management

Category: Investing, Psychology

How Much is My Blog Worth?

Category: Weblogs

A Year of Panic Redux

Category: Financial Press, Technical Analysis

New Column: The Street Gets Inflation Threat Backwards

Category: Employment, Federal Reserve, Inflation, Investing, Markets, Psychology

Exploration versus Share Buybacks ?

Category: Commodities, Investing, Markets

Anticipating Consumer Slow Downs

Category: Consumer Spending, Investing, Wages & Income