In any case, the error in the strategy cost the company dearly, showcasing yet again that, as in the case of Metallgesellschaft, proper risk computing is essential to any kind of hedging. Allayannis and Ofek (2001) show that companies generally do not speculate with currency derivatives, but maybe hubris could explain the excessive risk-taking by the management of Aracruz. Li and Tang (2010) summarizes the literature on hubris and excessive risk-taking by presenting three reasons for it: overestimation of management problem-solving capabilities; overestimation of the firm‟s resource endowments; and underestimation of the uncertainties the firm is facing.