You’re also in a morally worse spot—you run the risk that you are creating or amplifying the shortage, not just predicting and smoothing the consumption of rapidly-value-changing products. If you aren’t solving the problem given in the post (you could make more, but not at your normal prices), you’re not as clearly on the side of good.
I don’t follow. The idea would be that you aren’t contributing to the normal supply, you just stockpile in case of future emergency. This increases production during normal times slightly, and then when there is a pandemic you would stop purchasing and start selling. This reduces the need for manufacturers to produce more at higher marginal cost. How could it create or amplify a shortage?
It’s true you’d have no profit prior to the emergency (and large costs) but in theory that shouldn’t matter as long as your investors diversify.
Stockpiling over time, long in advance of a crisis is great (but might be tough to find those investors). Supply has time to adjust and you are not hurting anyone.
Stockpiling in a burst just before a rush, when it’s too late for suppliers to adjust production, is much less clear. You’re accelerating or in some cases creating the shortage, and you’re not changing the short-term supply at all.
Ah, okay. I guess that answers my question: you don’t think it’s possible to mitigate shortages by stockpiling without losing money in expectation. I wish it were—surge production is a much more tenuous solution that depends on being able to foresee a disaster shortly before it occurs, and even then it might not be possible to produce enough to help significantly.
I don’t follow. The idea would be that you aren’t contributing to the normal supply, you just stockpile in case of future emergency. This increases production during normal times slightly, and then when there is a pandemic you would stop purchasing and start selling. This reduces the need for manufacturers to produce more at higher marginal cost. How could it create or amplify a shortage?
It’s true you’d have no profit prior to the emergency (and large costs) but in theory that shouldn’t matter as long as your investors diversify.
Stockpiling over time, long in advance of a crisis is great (but might be tough to find those investors).
Supply has time to adjust and you are not hurting anyone.
Stockpiling in a burst just before a rush, when it’s too late for suppliers to adjust production, is much less clear. You’re accelerating or in some cases creating the shortage, and you’re not changing the short-term supply at all.
Ah, okay. I guess that answers my question: you don’t think it’s possible to mitigate shortages by stockpiling without losing money in expectation. I wish it were—surge production is a much more tenuous solution that depends on being able to foresee a disaster shortly before it occurs, and even then it might not be possible to produce enough to help significantly.