BP...should i go long..??

They are discussing it on CNBC right now if you want to hear the s experts.
 
One thing I'm not clear on is how well insured they are in all of this.

There's loss of revenue, cleanup cost plus compensation and legal costs. There's also the potential for criminal negligence cases.

I understand they are insured to an extent but not sure how well they are covered in relation to their total costs...
 
forker said:
warren buffet made his fortune off buying when everyone was running, this is a prime buying opportunity. nobody can pick a top or bottom. but you can get in at good value and hold it out for a year or 2 to make back a good sized profit... i have seen this strategy first hand with a friend buying into uk banks when people were queuing outside to get their money. everyone thought he was crazy including me. he was down for at least 5 months and then it shot up and he is now sitting on 30k profit..
Click to expand...

The comparison of ‘cheap’ banking stocks against those of BP for purposes of speculation is incompatible IMO. BP has the responsibility of settling both a financial and environmental disaster; there’s actually nothing much wrong with their business model (save for the obvious…), nor their balance sheet (again, save for the obvious). BP would need to have been drilling for 5-10 years, having seen nothing, and selling future contracts of that nothing to fund the further extraction of nothing, only to find water to be in a similar position as the banks found themselves in.
 
forker said:
warren buffet made his fortune off buying when everyone was running, this is a prime buying opportunity. nobody can pick a top or bottom. but you can get in at good value and hold it out for a year or 2 to make back a good sized profit... i have seen this strategy first hand with a friend buying into uk banks when people were queuing outside to get their money. everyone thought he was crazy including me. he was down for at least 5 months and then it shot up and he is now sitting on 30k profit..
Click to expand...

I wish folk would stop quoting Buffet, the markets (and those who really drive them) need their cheer leaders and icons. Yes he bought up GS when it was on its knees, but why, how, who tipped him the wink, who *allowed* him to do it and what was their motivation? You think he looked at the fundas and thought it was a sound business? More like he knew it was going to be sorted over and above Lehman etc..

Wouldn't surpise me if he was actually *in* nothing, and all his assets were really in gold and swissys, his genius lies in the fact that he's got that big that he can take the pi55 (which he does on a regular basis) with other peoples' money.. He moves markets 'cos in tandem with the elite silly retail punters hold onto his every word, brilliant work that only one or two are allowed to do..

He is the Wizard of Oz, there'll be a day when the curtain is pulled back...and let's be honest, if we were all 100 and had kept mostly everything we'd ever invested in for 80 years we'd be doing OK...no guarantee that it's a winning strat. moving forward.. what if what Buffet recognises as capitalism is dismembered?
 
DionysusToast said:
Personally, I wouldn't risk a long term position on BP at this time as it's too risky either way. I have taken advantage of the volatility this week and day traded it. It's been on my daily list every day since the leak.

On the dividends. It does not make any sense for BP to continue paying dividends. This crisis is sucking cash from the company and we have no idea of how it will end for BP. It could be the start of the end for them. There is talk of them having to sell off assets to cover the cash flow, so to keep paying the dividend at this time is unlikely in my opinion.
Click to expand...

Trading the BP ADR I assume?
 
BP is becoming known in the industry as having a terrible safety/ incident record, firstly on land and now off shore. This was the reason they pulled away from on shore refining and more in to exploratory and drilling. Now it seems they can't even get this side of the business right. They are setting themselves up for a fall from world leader to also ran in my not so humble opinion.
 
Find it funny when people have suddenly started knocking BP.

Granted its a bad spill but talk of the company closing down is hilarious!

Remember its a HUGE company with gargantuan capitalisation and assets.

Some of you might say.. "so what? even the banks which went down were big too!"..

But here's the difference.

BP does something useful, something tangible. It digs oil - which everyone needs.
and the last time I checked its more difficult to start an oil company than starting a swindle agency (i.e Banks/Hedge fund) :))
 
In my humble opinion you're absolutely right; 3-6 months from now it'll all be forgotten and there'll be a mass scrabble to buy in....think I'll go long £1 a point LIMIT to open at, say 480-500? Sound reasonable?

Big Al
 
D70 said:
Could you do worse?
Absolutely.
Worth a small punt now to get the ball rolling?
Yeah.
Worst case scenario?
You double your holding at 3 quid something.
Click to expand...

Sound advice.

Real high probability trading.
 
Last edited:
Talking of the company, not trading it. I remember reading about Milken and junk bonds. The point was that his were not "junk". The rest of Wall Street called them junk because they did not know better, at the time. They were companies with problems and bonds and shares went up and down in tandem but the former were loans and interest on them got paid before dividends. Also, in bankruptcy, they get repayed first. In fact, bondholders could end up with the company and shareholders with nothing---just, in theory, like Manchester United to-day.

Does anyone have any idea of their present yield and what they pay at par?
 
Another thing is that under the 1990 Oil Protection Act the damages have to be split up, BP's share is 65%. An approximate is that if it runs at $60m/day for another 4 months the bill will be $7.2b...I didn't come up with this btw and there will probablly be a fine or something as well.
 
Credit Suisse reckon it could cost the company $17b. Who can tell what it will be once all the people on the coast start legislation. There are, also, the possible problems with the coming hurricane season. Can you imagine what something like Katrina could stir up and blow inland?
 
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