Biglari Holdings Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk (continued) We prefer to hold equity investments for very long periods of time so we are not troubled by short-term price volatility with respect to our investments. Market prices for equity securities are subject to fluctuation. Consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. A hypothetical 10% increase or decrease in the market price of our investments would result in a respective increase or decrease in the carrying value of our investments of $37,210 along with a corresponding change in shareholders’ equity of approximately 5%. We have had minimal exposure to foreign currency exchange rate fluctuations in the first nine months of 2021 and 2020. Southern Oil’s business is fundamentally a commodity business. This means Southern Oil’s operations and earnings may be significantly affected by changes in oil and gas prices. Such commodity prices depend on local, regional and global events or conditions that affect supply and demand for oil and gas. Any material decline in crude oil or natural gas prices could have a material adverse effect on Southern Oil’s operations.