ONLY Thinking About Making Money: Would Buying BP Stock be Smart Today?

[BrentWil]

Lets get real. BP isn't going down. It has over 101 billion in assets and its net profit is 16 billion a year. They survive and their price goes up again. You are looking at a 50 decline of its stock after this. You and I KNOW that this is a reaction to the oil spill not a legit devaluation of company. Excluding all moral issues and thinking only about making money for YOURSELF, BP is a smart buy. Agree?

I should say I would NEVER buy now, but for moral reasons.

[Stuart G]

1. Was buying GM Stock 4 years ago worth it?

Look back 4 or 5 years ago...was GM worth..sure it was down, but many serious problems. No matter what goes on,
BP brand is useless, and will be in one kind of litigation or another for the next 15 to 20 years...you do the math..

[BrentWil]

5. GM had business problems. BP does not. It is a money making machine. NT

[Ruby the Liberal]

12. GM is shopping underwriters for their IPO

Today. Now. As we speak.

[yodoobo]

18. courtesy of the US taxpayer

If it weren't for you and I being so generous with our taxes, the doors at GM would be closed right now.

[Ruby the Liberal]

32. No doubt. However (not withstanding their escalation of Mexican plant escalation),

how many jobs were saved?

its ugly no matter how you look at it.

[BrentWil]

24. They do, but I won't be buying... has the business model changed or is there any long term hope?

[Ruby the Liberal]

33. Has BPs business model changed, or are you simply looking to pick the bones

of the gulf before their legal team takes over?

[rurallib]

14. Plus BP has all sorts of leases etc. Oil is not going away soon.

but it may go much lower yet.

[LeftyFingerPop]

15. I'd say that BP has a teensie business problem right now.

[BrentWil]

17. Not really. It has a cost. The money will still be rolling in. NT

[LeftyFingerPop]

21. It will be rolling out, too.

[BrentWil]

25. Some, but not the amount people think NT

[LeftyFingerPop]

28. Have you ever owned a stock that dropped 90%...

when all of your months of due diligence before investing in it told you that it was impossible for it to drop?

Have you ever sat at your computer like a deer in the headlights as a stock dropped 3% per day for weeks?

BP is lying as to the scope of the problem.

They are going to have lawsuits out the ass.

This oil is going to end up on the east coast.

They are screwed.

Bookmark this post.

[ShadowLiberal]

27. BP has safety problems which turn into business problems

BP has a history of cutting costs on safety to boost profits, it may work in the short term, but it also causes all the most recent oil related accidents to be caused by BP, and give the massive fines/legal fees/clean up costs. If BP doesn't get it in their heads that cutting back on safety and applying for permits from the government to skip writing safety documents makes them have many more accidents then the rest of the oil industry, then BP will continue to lose more money in accidents every few years. Some accidents may cost BP a minimal amount compared to the size of the company, but others like this current spill will seriously cripple their company and shrink it's size and turn many customers away in disgust.

Keep in mind also, the safety they cut back on isn't just good for preventing accidents, it's good for a strong defense in lawsuits after accidents to show that they went above and beyond what was necessary to make their oil platform/refinery/etc safe. Just applying for the right to skip having to safety documents/procedures can make you look criminally negligent after a disaster like this.

[yodoobo]

7. well GM was basically insolvent well over 4 years ago

But their mass and political clout allowed them to run as a zombie for a very long time.

BP still has very excellent cash flow and I suspect that are some internal financial firewalls to shield the British based BP corporations from operations in the United States. World wide Companies the size of BP have one single face to the customer, but are usually compromised of dozens or hundreds of sub-corporations based on country that operations are occuring in.

Buying the stock actually wouldn't even make a difference to BP, since you would actually be buying it from another investor and not the actual company itself.

BP received the funds from the stock IPO a very long time ago.

[customerserviceguy]

29. In November, 2008

I picked up a bit of Ford stock for under $2 a share when all three US automakers looked like they were in the same sinking boat. I figured that Ford had strengths that the other two didn't, and I was right. I unloaded it a few weeks ago at about $13.30 a share. Didn't own much, but it was a nice rate of return.

'Moral' reasons aside, the OP's question is pretty much like the calculation I made a year and a half ago. It would be no less moral to buy BP than it would to buy Exxon, Standard Oil, Shell, etc., they all produce the same product, and they all take the same levels of risk, it's just that BP drew the short straw when it came to having those risks finally get the better of a well.

If offshore drilling is restricted to existing wells, then the value of the assets held by the oil companies goes up. And let's face it, which company has fallen the farthest, the fastest? The OP makes a good point, BP has oodles of cash, and the British government will bail them out just like the US government bailed out GM, Chrysler, and the banksters.

I've been tracking BP's stock price for the last few weeks, at some point, it will hit bottom. If it has learned well from the Exxon Valdez case, it will figure out how to get out of this for a small fraction of what it should cost them.

[Duer 157099]

2. There was a similar post by someone a couple weeks after the spill

He said he was a buyer. I'll bet he lost a ton since then; hope he had a stop loss.

Knock yourself out.

[BrentWil]

8. Media coverage is different now... the market has reacted for a long time to this ...

50 percent market de-capitalization is huge.... and I don't think realistic with the income it pulls in.

[RB TexLa]

44. He's only lost a ton if he's sold at the lower price. Perhaps he like I am holding it a bit longer

The lower price just allows more accumulation for less money, and thus a larger profit at a sell in the future.

[sendero]

3. I don't know..

.... what makes you think that. It is quite possible that they will be found CRIMINALLY LIABLE for this accident and lose all gov't business, which would fuck them but good.

If you have money to lose, go ahead but don't think for a second that you can't lose it.

[yodoobo]

16. criminal liability is a very good possibility

But it will be localized to the local operating company and some local operations chief and a few of his lieutenants will take the fall. The ruling class at the top won't be touched. That's a sad reality.

Even if BP was forever banned from selling to the US government, it wouldn't hurt them THAT much.

Since oil in fungible, they would the sell amount of oil to the rest of the world, other oil companys would sell more to the US, and the reset of the world would buy less from the other oil companies.

Put simply, oil is scarce enough that every barrel that is produced by any oil company is sold to someone (unless of course it leaks into the ocean).

[BrentWil]

19. People can go to jail and the company can pay punitive damages... but that is the worse that will

happen. BP has the assets and income to survive and be fine in the long term.

[Duer 157099]

4. ... not to mention that "ONLY thinking about money" is what got us into this situation

No, I can never recommend that attitude, NEVER. Don't reward bad behavior and enrich yourself at other's expense/misery.

[janx]

13. Thank you!

:hug:

[caledesi]

39. Well said DUer! NT

[LeftyFingerPop]

6. Don't buy it, sell it short, and ride it all the way to zero...

because that is where it will be in a year or so.

[yodoobo]

23. Its future is uncertain, but selling it short

would cause me alot of sleepless nights.

Short = limited profit, unlimited loss potental.

And the only commodity that is more in demand worldwide than oil is food. And there are a million times more food companies than oil companies.

[Skink]

9. I'd wait until it gets to junk status.

[Ruby the Liberal]

11. Bonds hit junk pricing last night.

[Ruby the Liberal]

10. Not at all. The market does not like uncertainty.

BP has been BSing this whole time - whether about probabilities or volumes and there isn't a sane person in the free-thinking world that doesn't know this. The oil is undersea where it can't be seen or quantified.

For all we know, the engineers are working off of a 5k leak estimate while the Lawyers and PR people are discussing 100k.

BP will be a buy 1) when people start to actually believe them and 2) 5 minutes before they announce that the have blocked this.

If you think that is today, good luck and let us know how that works out for you.

My target is $21-22.

Lets meet up Sept 1 and see how we both did.

[Duer 157099]

20. You may just as well ask me: "Would you marry Limbaugh for his money"

The answer is FUCK NO, never, not ever ever ever EVER.

There are just some things that money cannot buy.

"Investing" in the stock of a scumbag company, to me, is the same.

[caledesi]

41. Amen DUer! nt

[TheFarseer]

22. I debate that myself

People saying BP will not survive are simply not looking at the facts. Of course BP will survive, but consider that it is highly likely not all the shoes have dropped yet.

1. The spill could be worse than we are being told and it isn't stopped yet. Laws could be changed so that BP will bear more of the cost of cleanup. This will push it's share price lower.

2. They may have to cut the dividend if they need cash for cleanup. Share price will plunge if they do this as it was the most compelling reason to buy the stock before the spill.

So what I'm saying is there will be a good time to buy BP, but we might not have hit it yet.

[janx]

35. Are you kidding me?!

?

[Tutankhamun]

26. Stocks fall because of fear and rise on greed.

If BPs fundamentals are good it doesn't really matter so much. People will be very afraid to put their money in BP for a very long time.

[Ruby the Liberal]

34. Fundamentals don't address technicals (price/volume/confidence)

Why trading solely on Fundamentals went out like a decade ago.

[Tutankhamun]

52. Yes, I find fundamental analysis useless. Technical is far more important for swing or day trading.

Which is all I ever do. I don't like to buy and (pray and) hold.

[Uben]

30. Unfortunately I can answer that

No, with a capital N! I was unfortunate enough to have had some BP stock before this happened. It's way down, but it's only one holding. I am very diversified. BP is not going down, but this is gonna cost em heavily, and that is going to affect profits for years to come, so I see no way it could be a good idea to buy now.

(of course, one has to consider that I thought BP was a good buy when I bought it. I was Wrrrrrong!)

[theoldman]

31. Did you not have a sell stop on your shares?

It probably was a good buy when you bought it and it will be a good buy sometime in the future.

[Name removed]

36. Deleted message

Message removed by moderator. Click here to review the message board rules.

[janx]

37. So it really is a casino now.

Nobody is interested in investing long-term, because they don't have to; ergo, they change stuff around and have no idea when it comes to ethics.

A generation or three ago, my grandparents invested in beer, among other things, but the big one was beer. We lived in a beer town. Those investments sat for a couple of generations. Now, the stock market is like a slot machine.

It is not surprising that the stock market and its effects on the economy are the way they are now.

[BrentWil]

43. It would be long term. NT

[Canuckistanian]

38. I heard that BP's current and anticipated share losses make it a target of a takeover

Royal Dutch Shell is paying VERY close attention to BP's plight.

So you're on shaky ground here as a potential shareholder. You MAY get a good deal if BP's individual protected assets sell for a good price.

But it's MORE likely that you'll take a bath.

[Art_from_Ark]

47. I'll agree, it's MORE likely that you'll take a bath

a bath in oily, slimy water

[Statistical]

50. You are aware that shareholders have to approve a takeover right?

Thus if the price is too low for shareholders they will simply say "NO".

It would be like saying you should be worried I might takeover your house and force you to sell it to me at a very low price. Better sell your house now because when I force you it will be for very cheap.

[safeinOhio]

40. I would not borrow $ or

bet the farm. You could also hedge your bet by buying other stocks in the sector that might gain from their loss like Ford did from GMs problems.

[BrentWil]

48. I wouldn't bet the farm either

[Duer 157099]

42. I hear that the meth market is going up too. Should I invest in that?

WTF is wrong with you people who see no problem with "investing" in these shitbag companies????

Don't you SEE why it is that they do what they do, because their shareholders (that would be YOU, if you buy) want MONEY!

Talking about this like it's just inert money being traded back and forth, rather than what it REALLY fucking is!

How much is your soul worth?

[janx]

46. Smooch...to you!

:hug:

[cbdo2007]

45. It is true that it will probably go back up and gain 50% or so after

this whole oil spill thing is taken care of. I would be worried making this "bet" though seeing as how they haven't even really stopped the leak yet. Once they stop it...stock price will start going up.

But in todays market there are so many other better companies out there where you can make a much better gain than 50% during the same time period. Look at Einstein or Rackspace or Sirius. All seem to be safer bets with much bigger payoffs than buying BP.

[Statistical]

49. I got burned by BP before (luckily had tight stop) but I got back in on Wed/Thurs.

I think I was simply early on my previous purchase.

I got back in for a couple reasons:
1) The media seems to be getting "bored" with the story.
2) Justice Dept announced they will not seek injunction to stop dividend payments
3) Obama retracted his claim that he will force BP to pay for laid off workers (no legal authority)
4) UK is starting to put pressure on the White House and that likely will tone down any future statements.

On a technical side:
Wed has classic sign of capitulation. Anyone scared likely dumped on Wednesday.
Thursday rebound was impressive because of the volume. 250 million shares changed hands on continually increasing prices.
If BP can sustain positive price and heavy volume (100+ million shares) going into weekend I think unless situation materially changes 28-32 is the base.

One thing I would caution is BP likely WILL cut the dividend and that is even without pressure from the WhiteHouse. So anyone buying the stock on dividend play alone will be very upset. Unless situation is much better by end of July (schedule for setting dividend payment for Q2) they will cut it (likely in half). By much better I am talking about 90%+ containment and relief wells within days of main well or leak completely stopped.

[blindpig]

51. Fuck Capitalism

It is a trap, we must let them use our money on the hopes that they will return funds sufficient to support us in retirement. They use the money to make the world worse, fatten their purses, and then mebbe if we are lucky we'll be OK in retirement. Bad deal.