Getting "Nimble" (latest from ePravda)
10-04-2015 | 08:06 AM
#11
Gets Weekends Off
Joined: Mar 2006
Posts: 567
Likes: 0
From: retired
10-04-2015 | 12:02 PM
#13
Banned
Joined: Dec 2009
Posts: 3,655
Likes: 0
From: Narrow/Left Wide/Right
I know it's popular to shoot the hedgers, but really, had anyone who claims they knew in 2013 that fuel would be $40 / barrel in 2015 should have shorted the market and made "Billions"
If Iran shows that they have a bomb, or any other major disruption to oil production, or demand goes back up and oil had spiked to $200/barrel, Delta would have looked like a genius having the hedges.
It's basically insurance. You can go without it and not have a loss and look really "smart" or you pay your premium and be pleasantly happy that you didn't have to use it, but if it's needed and not in place.... well you only get to make that mistake once.
10-04-2015 | 02:51 PM
#14
On Reserve
Joined: Aug 2014
Posts: 18
Likes: 0
Maybe we should hire some "super smart" pilots to run fuel hedging.
I know it's popular to shoot the hedgers, but really, had anyone who claims they knew in 2013 that fuel would be $40 / barrel in 2015 should have shorted the market and made "Billions"
If Iran shows that they have a bomb, or any other major disruption to oil production, or demand goes back up and oil had spiked to $200/barrel, Delta would have looked like a genius having the hedges.
It's basically insurance. You can go without it and not have a loss and look really "smart" or you pay your premium and be pleasantly happy that you didn't have to use it, but if it's needed and not in place.... well you only get to make that mistake once.
I know it's popular to shoot the hedgers, but really, had anyone who claims they knew in 2013 that fuel would be $40 / barrel in 2015 should have shorted the market and made "Billions"
If Iran shows that they have a bomb, or any other major disruption to oil production, or demand goes back up and oil had spiked to $200/barrel, Delta would have looked like a genius having the hedges.
It's basically insurance. You can go without it and not have a loss and look really "smart" or you pay your premium and be pleasantly happy that you didn't have to use it, but if it's needed and not in place.... well you only get to make that mistake once.
10-04-2015 | 03:47 PM
#15
Racketeer
Joined: Mar 2015
Posts: 13,337
Likes: 822
From: N60.4858 W149.9327
Except the guy RA and EB hired was considered a radical in the hedging world. He ended up being fired/quitting after Delta was served a subpoena because he was trading commodities in his personal account ahead of big deals he was getting ready to make for Delta. It might have been wiser to hire a smart pilot.
10-05-2015 | 04:54 PM
#17
Racketeer
Joined: Mar 2015
Posts: 13,337
Likes: 822
From: N60.4858 W149.9327
Insurance mitigates financial risk. Hedges gamble on price. One can argue they are an educated speculation but they are not insurance. When was the last time you paid more than the initial premium for insurance. If you pay to unwind your insurance that is a stupid move. If your competitor isn't making that same gamble, then what are you protecting against?
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