Comments on: Nucor Not the Only One Holding High Priced Inventory http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/ Sourcing & Trading Intelligence for Global Metals Markets Wed, 23 May 2012 01:31:00 +0200 hourly 1 http://wordpress.org/?v=3.3.2 By: Testing Times for Steel Mills http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/comment-page-1/#comment-5261 Testing Times for Steel Mills Fri, 20 Mar 2009 17:04:11 +0000 http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/#comment-5261 [...] have Arcelor Mittal's mountain of debt but it just gave a profit warning for the first quarter as we reported yesterday down from a 34 cent profit last quarter and a $1.41 per share profit this time last year. Nucor [...] [...] have Arcelor Mittal’s mountain of debt but it just gave a profit warning for the first quarter as we reported yesterday down from a 34 cent profit last quarter and a $1.41 per share profit this time last year. Nucor [...]

]]> By: admin http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/comment-page-1/#comment-5229 admin Thu, 19 Mar 2009 20:50:36 +0000 http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/#comment-5229 Your comments are so insightful! Irrational exuberance? I've seen so many companies make that mistake. They are watching the data points and not the trends. And just as sure as I'm sitting here typing, purchasing professionals are looking at say aluminum, afraid to lock forward now for fear that.....volumes won't be there? The price will go lower? Who knows. In the meantime, I continue to fly SW. They still give you a bag of peanuts for free! Your comments are so insightful! Irrational exuberance? I’ve seen so many companies make that mistake. They are watching the data points and not the trends. And just as sure as I’m sitting here typing, purchasing professionals are looking at say aluminum, afraid to lock forward now for fear that…..volumes won’t be there? The price will go lower? Who knows. In the meantime, I continue to fly SW. They still give you a bag of peanuts for free!

]]> By: LP http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/comment-page-1/#comment-5227 LP Thu, 19 Mar 2009 19:44:56 +0000 http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/#comment-5227 "But on the whole, Southwest has fared far better than its peers by placing bright minds on internal forecasting, hedging and sourcing strategies." After hundreds of years of open markets and secular/cyclical business cycles, you would think there would be a certain level of importance placed in this department. Yet humans come out with, "it's different this time". History has shown starting with the Japanese rice bubble and Dutch tulips, that it's never ever different "this time". While SouthWest took some losses on the hedge, it probably gained a few new customers when oil zoomed from 60 to 147. They probably made more sound business decisions as they were not pressured with the price of crude. Stuff like not surcharging their customers for fuel, pillows, water and air bought them a lot of good will. One of the things that most traders and business professionals take a long time to learn is market psychology. They always assume the highs will go higher and the lows lower. Fear begets more fear and greed begets more greed. But the real truth lies some where in between Fear and Greed. It takes a special person to have the courage and the intellect to buy near the lows and sell near the highs. We are often afraid of finding out the what if. “But on the whole, Southwest has fared far better than its peers by placing bright minds on internal forecasting, hedging and sourcing strategies.”

After hundreds of years of open markets and secular/cyclical business cycles, you would think there would be a certain level of importance placed in this department. Yet humans come out with, “it’s different this time”.

History has shown starting with the Japanese rice bubble and Dutch tulips, that it’s never ever different “this time”.

While SouthWest took some losses on the hedge, it probably gained a few new customers when oil zoomed from 60 to 147. They probably made more sound business decisions as they were not pressured with the price of crude. Stuff like not surcharging their customers for fuel, pillows, water and air bought them a lot of good will.

One of the things that most traders and business professionals take a long time to learn is market psychology. They always assume the highs will go higher and the lows lower. Fear begets more fear and greed begets more greed. But the real truth lies some where in between Fear and Greed. It takes a special person to have the courage and the intellect to buy near the lows and sell near the highs. We are often afraid of finding out the what if.

]]> By: Topics about Banking » Nucor Not the Only One Holding High Priced Inventory http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/comment-page-1/#comment-5226 Topics about Banking » Nucor Not the Only One Holding High Priced Inventory Thu, 19 Mar 2009 18:12:07 +0000 http://agmetalminer.com/2009/03/19/nucor-not-the-only-one-holding-high-priced-inventory/#comment-5226 [...] MetalMiner added an interesting post on Nucor Not the Only One Holding High Priced InventoryHere’s a small excerptBuy low sell high, a trader's adage that everyone knows but companies only get right some of the time. Nucor announced it would post a loss of $0.55 - $0.65 per share for the first quarter due to poor demand. Shares fell 9.2% on the news . Of course none of us in the metals industry are surprised by these results. But there are a couple of points worth noting. Besides poor demand, Nucor said it had been, working off high priced inventory, (which should have worked its way through alread [...] [...] MetalMiner added an interesting post on Nucor Not the Only One Holding High Priced InventoryHere’s a small excerptBuy low sell high, a trader’s adage that everyone knows but companies only get right some of the time. Nucor announced it would post a loss of $0.55 – $0.65 per share for the first quarter due to poor demand. Shares fell 9.2% on the news . Of course none of us in the metals industry are surprised by these results. But there are a couple of points worth noting. Besides poor demand, Nucor said it had been, working off high priced inventory, (which should have worked its way through alread [...]

]]>