Last summer, a large hedge fund had a hunch: Lumber prices were about to crash because of excess inventories caused by a railway strike.
Before placing a massive short bet that lumber company share prices would fall, executives at the hedge fund confirmed the theory by hiring a drone to fly over lumberyards, people familiar with the matter told CNN Business.
“You could literally see lumber piling up everywhere,” one of the people said.
The bet paid off handsomely when lumber flooded the market, crashing the price of the commodity and lumber companies.
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