What Went Wrong?
While most of Amaranth's initial energy investments were more conservative in nature, the energy desk consistently posted annual returns of around 30%. Eventually, Hunter was able to make more speculative positions using natural gas futures contracts. This worked in the fund's favor in 2005 when hurricanes Katrina and Rita disrupted natural gas production and helped push the price of natural gas up nearly three-fold from the January low to the November high, as shown in Figure 1, below. Hunter's speculations proved correct and earned the company well over $1 billion dollars and an epic reputation.