Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
Many of the corporate managers that we talk to take the position that it is there job to forecast financial markets. That may very well be if they are currency traders, or commodity brokers or derivative structurers. The plain truth however is that most managers are responsible for some part of the process of making and selling widgets of some sort. While the making and selling of widgets probably involves elements of the financial markets, that is not the main goal of the corporation. For instance – does Kellogg’s sell Corn Flakes because they speculate that the price of corn is going to fall? Of course not! Thus why do manufacturing managers still think it makes sense to try to time the market with their purchases and their hedging strategies? If they had that skill they should be hedge fund mangers!
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