Jump to content
House Price Crash Forum
Mega

Bp Getting Killed This Morning!

Recommended Posts

At some point, presumably when it gets back to March 2009 levels, it will be a buy?

Trying to catch a falling knife in this environment with so many very large unknowns is a dangerous business.

I wouldn't think about buying BP until I was absolutely certain that the knife had clattered into the ground.

I would much prefer to miss 10% of the rise from the true low than to buy above the true low, stop myself out when losing money and then become scarred by the experience and miss the right time to buy.

Share this post


Link to post
Share on other sites

At some point, presumably when it gets back to March 2009 levels, it will be a buy?

I posted on another thread that 23 out of 24 (experts)brokers on Sunday had them on a buy note the other on a hold.

must be a good long term buy now after the falls any thoughts?

Share this post


Link to post
Share on other sites

I would much prefer to miss 10% of the rise from the true low than to buy above the true low, stop myself out when losing money and then become scarred by the experience and miss the right time to buy.

I have no idea what that means?

Share this post


Link to post
Share on other sites

I have no idea what that means?

Means there's a high likelihood of further substantial falls.

If you disagree with that, you could bet the shop on it. Or if you're a gambler you could take a small flutter. I'm doing neither, though that's really because I don't invest in fossil fuels, which spares me the temptation of trying to play the BP situation.

Share this post


Link to post
Share on other sites

I have no idea what that means?

BP is trading at something like 420p.

If it gets to 250p and starts rising, I would be happy to buy it when it gets to 275p if I thought that 250p was the true bottom based on the removal of as much uncertainty as possible.

In my experience, a lot of people why try to "catch a falling knife" before all of the facts and risks are known, end up buying at say 400p, selling at 350p because they can't stand the losses and then "hate" the stock and stop watching it and never get the chance to buy in the 250p to 275p range.

I just made up the numbers to illustrate the point. I have no idea where the low will be or whether we have actually seen it already. All I know is that there is still too much open ended risk for me to consider buying it.

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable

I heard that Lloyd Blankfein dived down with a spanner and broke the well personally to cover his short positions.

Share this post


Link to post
Share on other sites

I just made up the numbers to illustrate the point. I have no idea where the low will be or whether we have actually seen it already. All I know is that there is still too much open ended risk for me to consider buying it.

Instead of making up numbers, you could take a historical analogy.

Summer 2008, all the banks had taken big falls, most of them had had rights issues. Lloyds (the prudent) and HSBC (with big still-profitable Asian business) hadn't. You might have anticipated a rebound after the recapitalisation. Maybe bought RBS at a bombed-out price of 230p.

You'd've been right about a rebound to come. But it wasn't from 230p back to 400p or 600p, perhaps visiting 200p in the meantime. It fell to about 11p before sustaining a rebound, and is currently somewhere under 50p.

BP could be at that 230p point in a similar curve. Or it could be on a Woolworths-shaped curve. Or it could be at a genuine bottom. What kind of a gambler are you?

Share this post


Link to post
Share on other sites

I'm surprised they've fallen so little since the problems.

They could be sued for billions and lose market share in the US and maybe the rest of the world.

Share this post


Link to post
Share on other sites

I'm surprised they've fallen so little since the problems.

They could be sued for billions and lose market share in the US and maybe the rest of the world.

Not the half of it, treat it like a political football for a while, then set the invesmtent banks on the stock and takeover at a low price and welcome in new US owners, US then has access to more resources without starting a war or two.

Edited by OnlyMe

Share this post


Link to post
Share on other sites

Instead of making up numbers, you could take a historical analogy.

Summer 2008, all the banks had taken big falls, most of them had had rights issues. Lloyds (the prudent) and HSBC (with big still-profitable Asian business) hadn't. You might have anticipated a rebound after the recapitalisation. Maybe bought RBS at a bombed-out price of 230p.

You'd've been right about a rebound to come. But it wasn't from 230p back to 400p or 600p, perhaps visiting 200p in the meantime. It fell to about 11p before sustaining a rebound, and is currently somewhere under 50p.

BP could be at that 230p point in a similar curve. Or it could be on a Woolworths-shaped curve. Or it could be at a genuine bottom. What kind of a gambler are you?

In the cases of Bre-X and Enron, I watched a lot of people lose a lot of money because they bought before the facts were known.

Markets seem to have some sort of memory about where prices have been and often think of a lower price as being a bargain rather than a sign of a fundamental change in outlook.

Share this post


Link to post
Share on other sites

Not the half of it, treat it like a political football for a while, then set the invesmtent banks on the stock and takeover at a low price and welcome in new US owners, US then has access to more resources without starting a war or two.

Yes, this has crossed my mind - it would not surprise me to learn that a US oil cmpany has bought out a much-devalued BP someime in the next year or so.

Share this post


Link to post
Share on other sites

Yes, this has crossed my mind - it would not surprise me to learn that a US oil cmpany has bought out a much-devalued BP someime in the next year or so.

There has been some chatter about this in the US already.

The argument is that BP suffers from very weak management and that someone like Exxon could manage them much better.

The irony that the second worst oil spill in the US was the result the actions of an allegedy drunk captain on a ship owned by an Exxon subsidiary is not lost on me.

Share this post


Link to post
Share on other sites

Do BP not have insurance against this sort of thing?

I went through their annual report a few weeks ago.

They stated explicitly that they self insure against these types of problems.

From memory, the only line in their balance sheet that could possibly represent accumulated reserves against something like this was USD 9 bn.

Share this post


Link to post
Share on other sites

I went through their annual report a few weeks ago.

They stated explicitly that they self insure against these types of problems.

From memory, the only line in their balance sheet that could possibly represent accumulated reserves against something like this was USD 9 bn.

I pity the poor subby who's equipment failed.

Share this post


Link to post
Share on other sites

I pity the poor subby who's equipment failed.

TransOcean claim that BP specifically indemnified them against any costs incurred from an event like this.

Given that TransOcean are headquartered in Switzerland, I can only see tensions between the US and Switzerland rising, especially after all of the tax probes and challenges to Swiss banking privacy laws by the US.

The other sub is Halliburton. Given the Dick Cheney connection to Halliburton, I can see a spiteful, vindictive attack on them by Democrats.

It is a pity that this disaster is probably going to reveal the worst about US politics.

Share this post


Link to post
Share on other sites

be interesting to see where their 5% dividend goes... one of the major reasons for buying into these giants is the dividend payout kicking the savings rate in the teeth - any capital gain is a bonus. In this case I debated holding 10% gold 10% BP and 80% cash - but I eventually opted for 10% gold 10% silver and the rest in cash.... oh how I wish I'd gone 80% silver - but that is 20-20 hindsight. Still think BP is worth having if it finds a bottom, but only if their dividend stays above what you can earn in the bank...

Share this post


Link to post
Share on other sites

be interesting to see where their 5% dividend goes... one of the major reasons for buying into these giants is the dividend payout kicking the savings rate in the teeth - any capital gain is a bonus. In this case I debated holding 10% gold 10% BP and 80% cash - but I eventually opted for 10% gold 10% silver and the rest in cash.... oh how I wish I'd gone 80% silver - but that is 20-20 hindsight. Still think BP is worth having if it finds a bottom, but only if their dividend stays above what you can earn in the bank...

There is already chatter in the US about forcing BP to suspend its dividend until the cleanup is completed and paid for.

Share this post


Link to post
Share on other sites

TransOcean claim that BP specifically indemnified them against any costs incurred from an event like this.

Given that TransOcean are headquartered in Switzerland, I can only see tensions between the US and Switzerland rising, especially after all of the tax probes and challenges to Swiss banking privacy laws by the US.

The other sub is Halliburton. Given the Dick Cheney connection to Halliburton, I can see a spiteful, vindictive attack on them by Democrats.

It is a pity that this disaster is probably going to reveal the worst about US politics.

why would anyone indemnify a third party for their equipment failure.....of course, they ARE going to say that though.

Share this post


Link to post
Share on other sites

This has nothing to do with houses and everything to do with the investment part of the forum (please visit!)

I bought BP shares with the spare cash I have lying around that might have gone towards a house.

And I have some Transocean too - feckin brilliant!

Share this post


Link to post
Share on other sites

why would anyone indemnify a third party for their equipment failure.....of course, they ARE going to say that though.

If you lease a car, you are the registered keeper and have to insure it.

BP have effectively leased the rig. Because they self insure, there is no insurance policy for them to provide to TransOcean as proof of insurance so they had to provide an indemnification.

To extend the lease analogy further, if the manufacturer of the equipment has been negligent the lessee and lessor might have a claim against the manufacturer for damages.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 141 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.