Idea to hedge your fuel for summer 2011

C

C-SIDE

Member
Sep 6, 2009
313
Michigan City, IN
Boat Info
2001 340 Sundancer
Engines
6.2L w/ genny
So your worried about fuel prices going up. Here is an easy way to hedge your fuel for 2011

  • Estimate your annual fuel price
  • Now, take that estimate and invest it in an oil/natural resource ETF
  • If fuel/oil prices go up, you lose at the pump, but you win on your investment
  • If fuel prices go down, you win at the pump, but you lose on your investment
The big risk for you is if fuel prices go down, because you locked yourself into higher fuel prices. However, there are ways to hedge that risk too, but I truly believe oil is only headed higher from here

This assumption exludes any transaction prices and cap. gains taxes on your investment, so plan accordingly

Happy hedging
 
Option 2:
Ski mask & handgun
 
I was actually kidding.
 
comsnark said:
It is speculative drivers like this that result in the large swings in fuel prices we periodically see.

Not that there is anything wrong with it: It is, afterall, capitalism in action.
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No, speculation is not hedging and vice versa. I could give a lesson on markets and derivatives, but I'm way to lazy. Research the two and you will soon conclude your assumption doesn't fit so nicely with economic theory. Although it plays very nicely to the press and those you are not well versed in the markets
 
Quint4 said:
I was actually kidding.
Click to expand...

yeah, because you don't want to mess with The Policewomen of Cincinnati!

Police-Women-of-Cincinnati.jpg
 
<<deleted>>

I know my original post has been already quoted
I only realized later that while short, it was posted in the wrong forum, was not appropriate for general boating discussion and was not going to bring the thread onto a good track.
 
Last edited:
Another idea would be to use a leveraged oil fund where the fund invests in derivatives that have the effect of multiple of the market price. e.g., if WTI crude goes up 10%, the fund value goes up 20%. (caution, works the other way too!).

Rather than buying that new big yacht now, put the cash you would lose in 5 years depreciation on the big yacht into in one of these leveraged funds. Then when oil hits $200 in 5 years, yacht values will tank so you will be able to cash in your fund investment, get the yacht at a bargain, and have some left over for the $10/gallon fuel.

(fine print - your results may vary, professional actor/model used in photos, .......)

Too much coffee this morning I think?
 
Option 3: siphon hose and a milk jug (j/k). Maybe a market for locking fuel caps? My boat holds WAY more fuel than my truck!
 
Only problem with option 3 is the milk jug. I'm thinking a tank on wheels.
 
Option 4: Park the Suburban and drive the motorcycle. Commute is 104 miles a day. Suburban use 7 gallons, the bike 2.5 gallons. Bank the extra 4.5 gallons in a separate account. For me that is over 700 gallons saved. That includes riding the bike when the temperature is above 35, and in the rain when above 70. 700 gallons times $3.25 is $2,275 savings. Even with the bike maintenance, that leaves about $1,700 for fuel on the boat. Plus I have 2 toys to play with.
 
C-Side's idea is a good one and likely will pay handsomely. I'm a recently retired financial advisor and I have much of my own portfolio in ETF's. LIke someone said, they are much like mutual funds but trade like stocks. They also don't have the annual operating expenses that mutual funds charge.

A similar idea but possibly safer would be to invest in two or more ETF's to spread your risk around a bit.

If you know enough about investing to feel comfortable doing it yourself, one could open an account with an online brokerage (ETrade, ScottTrade, etc.) and pick your own ETF's. If, like most people, you aren't all that familiar with investing and how it works, I'd suggest not doing it.

Most financial advisors that are worth a darn won't mess around with a small account, and the ones that will probably are newbies in the investment world and will take any account that walks in the door. That's probably not who you want giving you advice.
 
Friends who are emergency room doctors would find a lot to agree with your mom about motorcycles...
 
Yeah, I did the motorcycle commute rain or shine... until I ended up under a truck in the rain. No more. riding in the rain isn't worth the few bucks you'll save on gas. Shine only riding from now on, and only recreational at that.
 
Knock on wood, yes I put the bike down a few times, never any injuries. I am also in a different class than most who have accidents. There are not to many bikers that are coming up on 1/2 million miles on 2 wheels. I driven on ice, -10 degrees and 4 inches of snow. Not by choice. Darn weather men can never get their forcast right! Iaverage about 18,000 a year on 2 wheels now. That is 4 to 5 times the average.
 
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