suppose you are captain of a cruise ship. When the cruise industry does well you get paid more: there are more trips and people pay more for cruises, which increases your pay. But if there’s another “poop cruise” incident, demand might fall, leading to fewer trips and lower fares, meaning lower pay or even the threat of losing your job. A cruise ship captain can hedge poop-cruise risk by investing in hotels or land-based resorts or other companies that profit when cruises are unpopular.
