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Janin posted:If you're in BP as an "investment", you should have sold your entire position as soon as their well detonated. Even if you think it'll recover in a few years, there's no sense in holding shares while it's setting new minimums weekly. A risky one sure, but not an investment? I was certainly not trading based on market indicators, and support levels hoping to dump it as soon as sentiment picked up. I saw a company that was and is currently the most hated company in the world and the market was reflecting that. Sure knowing what I know now, perhaps my purchase may 15th was not as much of a steal as I originally thought, but hindsight is 20/20. I do think BP will recover in a few years, but perhaps my judgement is poor. I obviously predicted the "negotiations" between BP and the government would go differently. And I think your definition of investment is off not mine. I don't care if BP sets new lows as long as I believe it is attractively valued I will continue to average in within my risk tolerance. Just because something is uncertain doesn't mean it is not an investment. BP should have at least tried to get some control possibly telling the gov to proceed with distributions and send BP a bill each day and they will write checks, as long as it is within reason, this would place BP in a much better position to make sure it's not made into pork, increasing the total cost Thoogsby posted:If you don't think BP was paying that money anyway you're being foolish. It's better for them that they get the "BP TO PUT 20 MIL IN ESCROW FOR GULF RELIEF" headlines now than some page 7 story in 2 years that says "today BP settled in court to pay $xx to such and such". The fact that you wrote 20 MIL instead of BILLION shows how little the number in the headline means. I do think BP should be making payouts, but trusting the government to do it is retarded and will increase the total bill. On the bright side since the Q4000 started pumping the LMRP cap is much more visible leading me to believe that a majority of the oil is probably being captured. Bigntasty fucked around with this message at 05:27 on Jun 17, 2010 |
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Jun 17, 2010 05:14
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Also since you all have such great insight. Can you give me a good reason not to invest in RIG cause in all likelihood (90%) they will not be liable at all and its selling for half price. Obviously it is risky but it seems to be a good investment. And yes I call it an investment cause I don't plan on selling it until its appropriately valued, and its yielding 7% this year
Bigntasty fucked around with this message at 05:37 on Jun 17, 2010 |
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Jun 17, 2010 05:32
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greasyhands posted:You're pretty short-sighted if you can't see how cooperating with the government and conceding some of the things they want is definitely in their best long-term interest right now. The Government could do much worse than have them set up a fund to pay restitution, and BP knows that... why don't you? If BP starts stonewalling and making a bunch of demands it's going to get ugly for them real quick. Yeah exactly. There is very little chance of shareholders getting completely wiped out in all of this, but the best way to make that happen would be to take an overtly hostile stance against the administration at this point. Remember on top of clean up costs and damages the administration also gets to impose a per-barrel spilled (!) punitive fine that is essentially unlimited if they find that it was due to negligence (it was). And if that isn't enough, if you piss on the political establishment hard enough, congress can do whatever the hell it wants retroactively. With this deal, they have the president publicly saying that it is "in everyone's best interests for BP to continue to be a strong viable company." Heck, they might even get out of this only paying that $20 billion in damages plus clean up costs. Was a shareholder before this announcement, will continue to be for at least another year or two.
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Jun 17, 2010 05:36
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Bigntasty posted:Also since you all have such great insight. Can you give me a good reason not to invest in RIG cause in all likelihood (90%) they will not be liable at all and its selling for half price. Obviously it is risky but it seems to be a good investment. And yes I call it an investment cause I don't plan on selling it until its appropriately valued, and its yielding 7% this year Where are you getting 90% from? I see them as a better buy the BP but even if they avoid criminal liability they might face civil claims. It seems likely BP could go after them as well. What I really don't understand is why BP gaining afterhours on news of cutting dividends and giving up $20B? 
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Jun 17, 2010 05:59
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sc0tty posted:Newbie investor here, in the process of reading some of the books discussed in the first page. I have a finance degree however most of my time has been spent in IT so I'm not well-versed in the workings of the stock-market. What he's proposing with that strategy is buying into leveraged ETFs. The key thing to remember with a leveraged ETF is that half of it is comprised of borrowed money. If an ETF like UMPIX (mentioned in the book) is comprised of 200m in assets, 100m of that is bought with borrowed money. With that comes interest costs. There's also the fact that the ETF is constantly trading millions of shares in order to offset the cost of the interest, which also adds transaction costs into the deal. Over the years, this will introduce a lag into the fund, that is to say that it will fall behind the index it is tracking as a result of mounting interest and brokerage costs, because the fund has to keep producing greater and greater returns to overcome the costs and still match the performance of the parent index. Stay FAR away from anyone who advises you to take a long position on a leveraged ETF, because they are setting you up to lose money. These funds are designed to achieve daily objectives, not long-term ones, and they frequently fail to achieve even those goals due to the very high cost of maintaining the fund. In Canada, leveraged ETFs have become enough of a pitfall to potential investors that IIROC and FAIR have both issued warnings regarding them, which can be found here and here. I would strongly advise you to read the second document fully, as it documents the potentials and pitfalls of leveraged ETFs very thoroughly. Vatek fucked around with this message at 07:03 on Jun 17, 2010 |
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Jun 17, 2010 06:34
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The 90% number I pulled out of my rear end just trying to qualitatively describe how I feel about it. I see it as unlikely because -It is pretty well founded that operator's (BP, and others) have all liability ---unless they were grossly negligent, then BP could sue them, but BP calls all the shots on the rig so the fingers will be pointed at them, BP's lawsuit would be difficult because of the international nature of it. -They are Swiss and have shown they won't be pushed around ----Still paying special dividend, denies liability, giving companies poo poo over claiming act of God on rig contracts in GOM -No evidence for their liability in the matter -Operate very internationally, leaving US market wouldn't hurt them that much -Deepwater drilling isn't going anywhere, Even if the US drops DWD other countries will rent the RIGs -Had insurance on the DWH +550mil in cash for 2010 -Has dropped like BP as if it had the liability BP had Bigntasty fucked around with this message at 06:38 on Jun 17, 2010 |
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Jun 17, 2010 06:36
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GET MONEY posted:What I really don't understand is why BP gaining afterhours on news of cutting dividends and giving up $20B? Because it could have been a lot worse and now the market is getting a picture of where the punitive actions are heading, instead of it all being up in the air. Markets hate uncertainty more than bad news.
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Jun 17, 2010 06:40
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Bigntasty posted:The 90% number I pulled out of my rear end just trying to qualitatively describe how I feel about it. I see it as unlikely because I more or less agree with you on RIG, but someone else pretty much nailed it the other day in here - why are you in such a hurry to invest in RIG or BP? there are literally a million other companies that you can invest in that don't have a potentially company ending liability hanging over their head.
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Jun 17, 2010 06:48
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Vatek posted:What he's proposing with that strategy is buying into leveraged ETFs. Unfortunately, leveraged ETFs are basically a shady Wall Street invention to lure in unsuspected investors with promises of huge returns. Makes sense. Any criticms of his Dow Dividend & Double the Dow strategies?
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Jun 17, 2010 06:56
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greasyhands posted:I more or less agree with you on RIG, but someone else pretty much nailed it the other day in here - why are you in such a hurry to invest in RIG or BP? there are literally a million other companies that you can invest in that don't have a potentially company ending liability hanging over their head. I'm talking about it alot but the two together are less than 10% of my portfolio, the rest of it is pretty conservative and long term, I just think there is opportunity here with market fear and all, so I'm taking risks within my tolerance (not concerned about drops and will ride it out from here), my only regret is RIG has been a better bet the whole time, so I should have just stuck with them and left BP alone.
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Jun 17, 2010 07:13
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sc0tty posted:Any criticms of his Dow Dividend & Double the Dow strategies? Double the Dow is exactly the same thing but on the DOW index as opposed to the Midcap 400. His suggestion for implementing the dividend yield strategy is pure poo poo in my opinion. Buying into a company based solely on the dividend yield and no other factors and holding it for a year without ever looking at it again is completely retarded. And the logic of "it's a DOW company, it can't fail" is also incredibly stupid. Just because they're big companies doesn't mean they can't crash and burn. Nortel is a perfectly good example of this. When you're dealing with dividend yields at 5-10% per share a change in the share price can completely tank any profit you would have made from the dividends. With that strategy you need to take care to invest in companies that are fundamentally sound, and even so you still need to set up a stop and watch the share price carefully. It's also important to note that dividends are taxed as general wages and not capital gains in a lot of countries, so you may end up taking a much larger tax hit on any profits depending on where you live. Dividend yields CAN be a solid investment strategy but they're far from a "fire and forget" investment like Jason Kelly is making it out to be. Vatek fucked around with this message at 07:24 on Jun 17, 2010 |
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Jun 17, 2010 07:20
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Vatek posted:Double the Dow is exactly the same thing but on the DOW index as opposed to the Midcap 400. That sounds a lot more 'real-world' then what he has suggested. Sounds like good advice. I'm another 12 months away from putting any real money into the market both from an experience point of view and a starting-capital point of view. I'm currently working through his book, but of the books listen in the OP (or not) could someone suggest a next step in turns of reading. Kelly has got me all sorts of excited about how easy it will be to make money which is setting off every alarm bell in my head. Any other books which are a bit more down to earth. Or should I just work my way through everything in the OP in whatever order seems interesting? I've got the Four Pillars of Investing on order, including this, any suggestions?
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Jun 17, 2010 10:31
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the ivy portfolio by mebane faber is worth a read imo
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Jun 17, 2010 10:43
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I agree with someone a few pages back who asked why everyone is getting involved with the direct parties of this mess in the first place. Every other energy company has also gotten reamed the last month or so as well. The only difference is that they don't chance to lose their shirts like BP and possibly RIG. Sure, RIG may be held not liable, but that doesn't mean there is no chance for them to get dinged. This settlement is only the beginning of politicians going headhunting in an election year.
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Jun 17, 2010 14:33
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sc0tty posted:That sounds a lot more 'real-world' then what he has suggested. Sounds like good advice. I'm another 12 months away from putting any real money into the market both from an experience point of view and a starting-capital point of view. Buy Van K. Tharp's "Trade Your Way To Financial Freedom".
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Jun 17, 2010 15:38
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Bigntasty posted:A risky one sure, but not an investment? I was certainly not trading based on market indicators, and support levels hoping to dump it as soon as sentiment picked up. I saw a company that was and is currently the most hated company in the world and the market was reflecting that. Sure knowing what I know now, perhaps my purchase may 15th was not as much of a steal as I originally thought, but hindsight is 20/20. Bigntasty posted:And I think your definition of investment is off not mine. I don't care if BP sets new lows as long as I believe it is attractively valued I will continue to average in within my risk tolerance. Bigntasty posted:Also since you all have such great insight. Can you give me a good reason not to invest in RIG cause in all likelihood (90%) they will not be liable at all and its selling for half price. Obviously it is risky but it seems to be a good investment. And yes I call it an investment cause I don't plan on selling it until its appropriately valued, and its yielding 7% this year
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Jun 17, 2010 17:01
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Janin posted:
Is this not the case with any investment in the stock market?
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Jun 17, 2010 17:16
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i am not zach posted:Is this not the case with any investment in the stock market? In contrast, buying into a flaky company with a history of poor management and environmental disaster while it's being forced to suspend dividends and discuss bankruptcy is not "investment" unless you also consider playing slot machines to be investment.
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Jun 17, 2010 17:44
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Um, Mr. Buffett would point to big oil companies just as he would point to Coke and Walmart so don't start trying to justify not investing in BP along those lines. Oil falls under that banner of "stuff people will always need made by companies with infrastructure that isn't going anywhere". In fact didn't Buffett just make a huge investment in offshore drilling like last year?
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Jun 17, 2010 19:35
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Janin posted:In contrast, buying into a flaky company with a history of poor management and environmental disaster while it's being forced to suspend dividends and discuss bankruptcy is not "investment" unless you also consider playing slot machines to be investment. Do you really think there is even a chance that BP will declare bankruptcy because of this? That would be disastrous for literally every party involved, including the victims in the gulf. The US is placing a very calculated level of pressure on them, regardless of some of the things that have been said in the news.
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Jun 17, 2010 22:33
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Nobody's forcing it to discuss bankruptcy, stupid bloggers and media outlets are perpetuating a rumor that there's a chance BP will have to go backrupt. They are still a very strong company fundamentally.
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Jun 17, 2010 23:00
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The financial company I work for is probably getting 50 calls and emails a day about people wanting to buy BP, same as people wanting to buy bank stocks last year and housing stocks the year before. Because they're "cheap". Like how BP was cheap at 50. And 45. And 40. And 35. It just doesn't make sense to me to try to invest in such an obviously damaged company. Why not invest in an oil company that , oh I don't know, is killing the market right now? Like PXD.
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Jun 18, 2010 03:46
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Strict 9 posted:The financial company I work for is probably getting 50 calls and emails a day about people wanting to buy BP, same as people wanting to buy bank stocks last year and housing stocks the year before. Because they're "cheap". Like how BP was cheap at 50. And 45. And 40. And 35. Remember people did the same on fannie and freddie since they can't fail because the government is in them. That worked out good finally this week.
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Jun 18, 2010 06:11
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Strict 9 posted:The financial company I work for is probably getting 50 calls and emails a day about people wanting to buy BP, same as people wanting to buy bank stocks last year and housing stocks the year before. Because they're "cheap". Like how BP was cheap at 50. And 45. And 40. And 35. Uneducated investors (poo poo, even a lot of educated investors) always assume that what goes down must always come back up. Unfortunately, this mentality exists everywhere.. it is what keeps the 90's perma-bull vibe going.
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Jun 18, 2010 06:52
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Janin posted:If you don't even know whether you'll get your principle back, it's not investment, it's gambling. I disagree with this statement. You can't EVER know FOR SURE that your principle is safe, unless of course you keep all your money in an FDIC-insured savings account. That said, I do think there is a very fine line between investing and speculating/gambling. However, that line is quite subjective.
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Jun 18, 2010 06:57
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There is a pretty major difference between buying banks last year or Enron and BP now. The banks and Enron were collapsing because people found out their balance sheet was smoke and mirrors. I know BP is sound financially the risk is how much the government will make it pay, and like the tobacco companies. Real assets, products, and cash flow are the difference, you can't erase a barrel of oil. Now maybe the government will bankrupt them, but its not really a fair comparison.
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Jun 18, 2010 08:39
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Personally, I just bought £500 of BP shares because all of the financials over here are saying buy. And I can afford to lose £500, so a nice little gain in a couple of years would be sweet. If it all goes even more south, meh. Anyway (as you can probably tell from what I just said) I'm a newbie investor. From a UK standpoint, would I be better off just putting all my cash into a managed fund? I'm playing around with a couple of thousand quid to see what's best, because I'm about to inherit £10,000 and I don't quite know what to do with it. Edit: Does anyone invest in gold? I've had some money on Bullionvault.com for a couple of years now and seen a nice return. I'm sorely tempted to buy a lot more but I'm worried that the gold price can't possibly go a whole lot higher than it is now. paint dry fucked around with this message at 14:29 on Jun 19, 2010 |
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Jun 19, 2010 14:26
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Is anyone considering investing in Tesla when it goes public this month?
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Jun 19, 2010 17:10
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TLG James posted:Is anyone considering investing in Tesla when it goes public this month? MrBigglesworth posted:Do you have lots of money? quote:IPO Message TLDR: No.
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Jun 19, 2010 18:09
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If Tesla is set to sell at $12/share what kind of premium would I likely be facing if I don't get in on the IPO itself?
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Jun 19, 2010 18:17
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GET MONEY posted:If Tesla is set to sell at $12/share what kind of premium would I likely be facing if I don't get in on the IPO itself? Wait 3 months on an ipo. Even visa pretty much hit its offering price shortly after hype started dying down.
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Jun 19, 2010 18:44
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Christobevii3 posted:Wait 3 months on an ipo. Even visa pretty much hit its offering price shortly after hype started dying down. edit: vvv By average, I don't mean companies with average financial statements. I mean that if you look at all first-month IPO returns, on average, they have a negative stock return. That holds regardless of whether the company is "good" and has much more to do with market sentiment and under/overvaluation by the underwriters. Josh Lyman fucked around with this message at 00:42 on Jun 20, 2010 |
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Jun 19, 2010 23:49
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I'd argue Tesla is considerably better than an "average" company though ... And what happens after the first month?
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Jun 20, 2010 00:27
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OK so does anyone have thoughts on MOTR? Icahn seems to think it's good stuff. Wonder if it will see a pop if they renew the ATT/Verizon contracts favorably. If they lose those they crater, but I don't see any reason for either carrier to jump ship.
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Jun 20, 2010 16:38
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Josh Lyman posted:On the average, IPOs have a negative return in their first month. So if thats the case, my followup question would be whats the upside on stocks that went up a month after their IPO? I'd bet it'd be pretty high. Recent history where I wish I had got into the (truly public) IPO - Visa and Mastercard.
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Jun 20, 2010 20:06
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I had a curious idea lately; it's been fairly well documented that fundamentally weighted indexes, where the weights are based on earnings, sales, cash flow, book value, or even the number of employees, produce higher returns than market weighted indexes, the theory being that market weighting automatically overweights overpriced stocks and underweights underpriced stocks. The difference has been calculated by someone at 2% for flat or declining markets, and 0.4% in a bull market (but it's a bull market so who cares?) It occurred to me that if you used single-stock swaps and S & P futures, you could leverage this strategy up to hedge fund levels of returns. Surely there is a hedge fund somewhere that follows this strategy. And if not, who wants to start a hedge fund?
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Jun 20, 2010 22:22
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Hobologist posted:I had a curious idea lately; it's been fairly well documented that fundamentally weighted indexes, where the weights are based on earnings, sales, cash flow, book value, or even the number of employees, produce higher returns than market weighted indexes, the theory being that market weighting automatically overweights overpriced stocks and underweights underpriced stocks. The difference has been calculated by someone at 2% for flat or declining markets, and 0.4% in a bull market (but it's a bull market so who cares?) Aren't you just suggesting that a value-investing strategy actually works? I guess I'm not really seeing what the advantage to this system would be over just buying a large-cap value index fund. For example: ProShares Ultra Russell2000 Value (ETF), ProShares Ultra Russell1000 Value (ETF), ProShares Ultra Russell MidCap Vlue(ETF) Edit: I think one of the take home points from This short glance at the above ETFs is this little gem: quote:They tend to have higher expense ratios than standard index ETFs, even proportionate to the level of exposure. Also, the use of futures means that dividend income would be lower or non-existent. This is especially important considering that a significant part of the return from value investments tends to come in the form of dividends. flowinprose fucked around with this message at 22:48 on Jun 20, 2010 |
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Jun 20, 2010 22:33
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antishock posted:So if thats the case, my followup question would be whats the upside on stocks that went up a month after their IPO? I'd bet it'd be pretty high. Recent history where I wish I had got into the (truly public) IPO - Visa and Mastercard.
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Jun 21, 2010 03:20
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antishock posted:I'd argue Tesla is considerably better than an "average" company though ... And what happens after the first month? They don't make money and their current car isn't selling for crap and the next one isn't going to be out for over a year...
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Jun 21, 2010 13:04
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Anyone else think Nokia (NOK) is extremely enticing at its current price?
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Jun 21, 2010 13:15
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