We’re always looking to improve our investment strategies,
measuring our results as we go along. So we can make more
intelligent trading decisions, with one eye on generating real
alpha, and the other on effectively managing risk.
We are committed to creating value for our Investors by
finding companies with complex stories and untapped
potential in compelling industries. We form strong
partnerships with outstanding management teams and support
them with a flexible hands-on approach.
Investing has more to do with trust than it does with chance
and windfalls. Trust is an investment unto itself. It requires
generous attention and time to establish, but once earned and
with care it can span generations. We believe that there is no
honor greater than to be the keeper of another’s trust. As the
keeper of our clients’ trust, we must conduct business openly
and transparently and act diligently, discretely and always in
our clients’ best interests.
Our Standards of Practice and Care
At Praxko Capital, going the extra mile is much more than an
oft-repeated cliché. Client service means sharing
knowledge—our knowledge, with that of an extensive network of
professional affiliations and of clients’ experiences spanning
multiple industries and generations.
We believe we are a good fit for Investors who seek the
insights, expertise, and broad range of financial
instruments available to larger institutions without
sacrificing the personalized service that such institutions
cannot provide. Our services are custom tailored, affording
clients the opportunity to determine the level of service
that meets their needs while maintaining focus on the
creation, enhancement, preservation and legacy of their
wealth. Clients may rely on us in many ways that extend
beyond the strict definition of wealth creation to encompass
large and small concerns alike. We do not write off these
things as the cost of doing business; this is our business.
This is how we demonstrate our commitment. This is how we
exemplify our trustworthiness. This is how we care.
Commodity derivatives markets have been in existence for
centuries, driven by the efforts of commodities producers,
users and Investors to manage their business and financial
Producers want to manage their exposure to changes in the
prices they receive for their commodities. They are mostly
focused on achieving the same effect as fixed prices on
contracts to sell their produce. A silver producer, for
example, wants to hedge its losses from a fall in the price
of silver for its current silver inventory. Cattle ranchers
want to hedge their exposure to changes in the price of
cattle. Food companies need to hedge the risk of price
changes in green coffee, cocoa beans, cereals, milk and
other commodities they sell.
End-users want and need to hedge the prices at which they
can purchase commodities. A hospital system might want to
fix the price at which it purchases electricity for air
conditioning during the summer. An airline wants to lock in
the price of the jet fuel it needs to purchase in order to
satisfy the peak in seasonal demand for travel.
At the same time, Investors and financial intermediaries
can either buy or sell commodities through the use of
derivatives. They put capital that is essential to
facilitating the business of the producer and of the
end-user. They stand ready to transact with these market
participants; without them, producers and end-users could
not hedge their risks.
Today, the commodity derivatives market is global, and
includes both exchange-traded and over-the-counter (OTC)
derivatives contracts. It consists of a wide range of
segments: agriculture, base metals, coal, commodity index
products, crude oil, emissions, freight, gas, oil products,
plastics products, power, precious metals and weather.
Thousands of companies of all shapes and sizes, in all
industries and in all regions use commodity derivatives.
Manufacturers, energy companies, farmers, agriculture and
food companies, IT companies – these and other types of
firms make up the global commodity derivatives markets. They
all contribute to the supply of needed commodities for
ever-rising earth’s population. In this respect, the first
half of the 21st century is a critical moment. The world’s
population is expected to reach 9 billion in 2050, creating
ever-increasing demands on limited resources and providing a
challenge for industrial producers, market intermediaries,
policy makers, governments and international organizations.
This leads to concerns about price increases and
volatility, as Nobel Prize-winning economist Paul Krugman
pointed out in a recent editorial, saying that volatility
exists in our markets because we live in a “finite world”
where there is not, at any given moment in time, an
inexhaustible supply of oil, wheat, milk or other physical
commodities to meet the global demand for such products.
Simply put, prices are higher because the demand for a
product around the globe is greater than the supply.
In a nutshell, fundamental factors will significantly put
pressure on production, transportation, storage and delivery
Closer to the financial sphere, some government agencies,
academics and researchers have also pointed out the
important of the linkage between all actors in the commodity