PPRuNe Forums - View Single Post - Get ready for the fuel hedging loss!
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Old 6th Dec 2014, 20:52
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Shep69
 
Join Date: May 2008
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The Casino analogy is exactly correct. Even though many might do it fuel hedging is really just gambling--in our case with OUR money. Nothing more, nothing less.

Think about it -- why not just hold YOUR OWN cash reserves for your cash flow needs--invested in something sane--to account for fluctuating fuel prices. As has been demonstrated no one has a clue when new reserves will be found or catch up, or conflicts and bubbles will make prices spike. Over time, supply will catch up and the price will be where it should be.

The fact that hedge fund brokers make vast amounts of money verifies this--just like a casino they take their cut on every game and the gambler always loses over time. No matter if one 'wins' or 'loses' on a particular hedge one still pays the house and this is real lost money.
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