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The Ripple Code

oleh Johnson Sophie (2019-01-14)


What industry am I talking about? Utilities of course. The Ripple Code Review Many investment advisors incorporated utility stocks into portfolios because of their safety. They were seen as something to run to when fears of recession hit, or as an aggressive substitute to bond investing. The perceived safety of these companies is due in large part to government regulation. You see, most utilities are a monopoly. The government allows them to operate, but regulates them heavily. As a result, the business earnings are limited to a fixed return on invested capital. This gives the companies great stability and predictability (and makes them rather boring to many). Utility companies traditionally produce, generate, or distribute electricity or natural gas. Recently, the industry has grown to include water companies as well. These businesses are very basic. People will always need electricity, gas and water. You may know that a few years ago the industry started to change. The government started to deregulate parts of the business. This opened the floodgates to improved production, and allowed for the emergence of independent power producers. Suddenly, some utility companies could make more than a standard fixed rate of return. The industry became a very exciting one to invest in, and Wall Street took notice.However, once the initial excitement started to wear off some cracks started to appear. You all remember Enron. Clearly deregulation caused a number of unintended consequences that took a few years to work out. https://binarytradingfactory.com/the-ripple-code-review