RE:RE:RE:Hedges and the impact of missing analyst's estimatesHello Zlayta, I still now occasionally read some of the posts worthy of my sporadic attention and I have been a bit mad still at those who discourage my wrtitings, but nonetheless I am just yawning and relaxing I suppose..
The fact other oil companies make the stupid bets on placing high risk hedges is not smart for all these oil companies. What they did is look at probabilities before the currrent spike in oil prices. Based on the historic data they all bet it was highly improbable and did not bet conservatively. I would have collared the prices more but the oil companies like to become all financial gambling like and disguise it with the word ' hedging'. The way the bets are set up are miles away from the traditional hedge with more arbitrage and much lower risk. Everyone were looking at the same stupid things and a bet is a bet , it is not as much protection as you think after all the commissions and premiums. The fact fiew people see the gambling in this does not excuse the fact everyone gambled and overbet in 1987, 2001 and 2009. Everyone was rith, right?