OK Secret..... Tell AAI when to hedge then... When do they pull the trigger and buy hedges??? Do they buy them now at $100 a barrel?? Or do they wait until it hits $50 a barrel?? Is it going to hit $50 a barrel, or go back up to $140??
Read this link... You will learn something.. Maybe you forget that there was a price collapse of oil in 1986. Just 7 years after oil had hit an all time record of almost $70 a barrel, it then dropped to below $15 a barrel. Lets say SWA would have bought oil at $35 a barrel to fend off another price increase.. Once oil dropped to $15 a barrel SWA would have been losing tons of money since the current oil prices would have been only $15 a barrel.. You seem to think that hedging is so simple... Well in isn't. I can show you tons of articles where hedging has hurt DAL, CAL, AAI etc.. SWA has been very LUCKY to get the hedges they have.. But, if oil starts a landslide and hits $35 or $40 a barrel again then they are going to be in trouble. Its not nearly as easy as you seem to think it is. Nobody expected the recent rise in oil prices.. At least not to the extent that they occured. Ya, some analysts predicted $200 a barrel, but I just don't see that happening.. Heck, $147 a barrel has almost bankrupted Ford and GM.. Look at how badly its hurt them. Economys would collapse at $200 a barrel. Heck, ours started to collapse at $147 a barrel.... You can expect oil prices to continue falling now in order for the oil company's to get us all hooked on oil again.. When gas drops to $1.50 a barrel we will all be buying Humers again and gas guzzling SUV's... Trust me, the oil company's want you hooked on oil. And thats why the oil prices will continue to drop... Its just a matter of how far...
http://www.wtrg.com/prices.htm
Ty... I agree.. But what do they care?? They will get their money.. Look at Hoksema.. How much money did he make from inflating the price of MEH and causing a bidding war.. IMO it was brilliant. Sucks for the employees, but for the stockholders it was genious.. He has his money, so what does he care what happens to MEH after that.... The difference is that AAI mgmt needs to get AAI stock up. So they need to do things efficiently in order for that to happen.. I don't agree with it at all, but I understand it. I don't like thier tactics, but I also understand the hard handed tactics are the only way they can get what they need. I don't take it to heart, and I don't let it get to me.. Its just business, and we are just pawns...
Read this link... You will learn something.. Maybe you forget that there was a price collapse of oil in 1986. Just 7 years after oil had hit an all time record of almost $70 a barrel, it then dropped to below $15 a barrel. Lets say SWA would have bought oil at $35 a barrel to fend off another price increase.. Once oil dropped to $15 a barrel SWA would have been losing tons of money since the current oil prices would have been only $15 a barrel.. You seem to think that hedging is so simple... Well in isn't. I can show you tons of articles where hedging has hurt DAL, CAL, AAI etc.. SWA has been very LUCKY to get the hedges they have.. But, if oil starts a landslide and hits $35 or $40 a barrel again then they are going to be in trouble. Its not nearly as easy as you seem to think it is. Nobody expected the recent rise in oil prices.. At least not to the extent that they occured. Ya, some analysts predicted $200 a barrel, but I just don't see that happening.. Heck, $147 a barrel has almost bankrupted Ford and GM.. Look at how badly its hurt them. Economys would collapse at $200 a barrel. Heck, ours started to collapse at $147 a barrel.... You can expect oil prices to continue falling now in order for the oil company's to get us all hooked on oil again.. When gas drops to $1.50 a barrel we will all be buying Humers again and gas guzzling SUV's... Trust me, the oil company's want you hooked on oil. And thats why the oil prices will continue to drop... Its just a matter of how far...
http://www.wtrg.com/prices.htm
Ty... I agree.. But what do they care?? They will get their money.. Look at Hoksema.. How much money did he make from inflating the price of MEH and causing a bidding war.. IMO it was brilliant. Sucks for the employees, but for the stockholders it was genious.. He has his money, so what does he care what happens to MEH after that.... The difference is that AAI mgmt needs to get AAI stock up. So they need to do things efficiently in order for that to happen.. I don't agree with it at all, but I understand it. I don't like thier tactics, but I also understand the hard handed tactics are the only way they can get what they need. I don't take it to heart, and I don't let it get to me.. Its just business, and we are just pawns...
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