Something I hear all the time from failed traders, and from the perpetual camp of the ‘losers’ … is the thought process that there is an evil “them”, whose sole purpose it is to make sure that they fail as a trader, and fail at life.
“They’ll never let you win!”
“They run up the price of oil”
“They manipulate the price of Gold”
“They manipulate the price of Silver”
“They ran my stops on my trade”
They, they they.
Who is they?
There is no “they”. There is no “them”. When I hear people try to blame an evil “them”, this speaks to me of a mind that is defeatist in nature, and looking for a reason to accept failure as an acceptable standard and way to go through life. And you know, losing at something, or failing at something, I don’t mind. It’s a part of life, and a part of growing and learning. Losing, and then crying and whining? Blaming others to deflect attention from their own lack of initiative and at least attempting to improve their situation?
That drives me batty.
Let’s take the commodity of Oil. Something I hear time and time again, is how “Oil Speculators” run up the price of oil. How “Oil Speculators” are to blame for high oil prices“. Which is simply not true. Although there can be some (and I stress the word ‘some’) speculative premium that is built into any asset on this planet … it’s always struck me as funny that “Oil Speculators” are to “blame” for high fuel costs, but when the cost of Gasoline is plummeting, no one is taking oil traders out for a ticker tape parade and celebration.
And this causes me to return to my original point.
People who look to place blame on others for their own failures, usually fail to see the advantages that are staring them in the face.
I have written, vlog’d, blog’d at length that Oil Futures are a hedging mechanism. So that Airlines, Delivery Services, and anyone, and I stress that word …
… that is impacted by high fuel costs can hedge off the possibility of oil and fuel prices getting out of hand, and skyrocketing. Therefore, in the end, their bottom line is not impacted as heavily as it would otherwise be. It’s not as if the “Leauge of Evil Oil Traders” gets together three times a week, to try to make sure you spend more for gasoline in the coming month.
To which, I was met by scornful laughs by one particular individual, who went so far as to claim I was engaging in confirmation bias in an attempt to justify the existence of my own career as a trader?
Really jack-muppet? So I’m sitting here trying to tell you how …
… could save yourself some money, and your only rebuttal is that I’m trying to justify my own career. Yeah … when I say “anyone“, that includes you.
He couldn’t see the advantages he could participate in, or that I was kindly trying to take some of the time out of my day, and help him out. He didn’t want to take the time, and the effort, to learn to do this for himself. He didn’t want to sit down, and conceive that maybe he could take responsibility for himself and use his mind and the tools available to him to improve his situation. Oh no, it’s so much easier to “blame” those “evil Oil traders” and accuse me of trying to justify my own existence. And then there is the ultimate cop-out of … “Well at least I still have my morals“
What the heck does that even mean? “You have your morals“? What? So now it is moral for you to spend more money than you have to on something? That’s ethical? What sort of whacked-out thinking is that? Talk about desperation.
And you know, it’s not really that hard. It does take a little bit of knowing your own situation, keeping some records, and some basic math.
My wife and I spend about $2,200 a year on Gasoline when gasoline is at $2.85 a gallon, or higher. Crude Oil, and gasoline is falling in price. If they stay at their current prices, I’ll probably pay about $1,500 a year in gasoline. So thus-far, for the year, with Gasoline at their current prices, I’m saving about $700 a year.
At the moment, Oil is falling. I don’t see the need to hedge off what we call “input costs” of my household at this particular time. But if Oil prices start to rise … without needing to care at all where Oil prices go, I can take a position in something like the USO ETF, and hedge off my own gasoline costs.
It takes no innate level of “genius” to see this.
I can take that $700, and decide how much of that savings, I would want to spend on hedging off the cost of gasoline to my wife and I. Another way to think of it, is that you can take a portion of the money you are savings with lower gasoline, and spend a fraction of that savings on an “insurance policy” against gasoline costs rising.
Returning to my original point?
There is no “them”. There is no “they”. It’s not as if a “them” will come along, and tell me that I’m not allowed to do this. This is the same simple method that corporations around this planet engage in. Hedging off their “input costs”. They hedge may not work out. Oil may continue to plummet, and I lose money on the USO. Ok. Then I have cheaper oil.
The point here, is that the same advantage that large corporations have? I have.
And you have …
Disclosure: I have not yet initiated any ‘hedging’ trade or any positions at all on Oil or Gasoline at this time. I have no positions in any Crude Oil products at this time, and no businesses that I have a controlling interest in, has, to my knowledge, any positions in Crude Oil at all at this time.