BP worth a punt?
Discussion
DonkeyApple said:
ShadownINja said:
Them's proper professionals, innit.
Depends. You would actually expect something like this if they are proper brokers.The service and advice that they supply to an older woman approaching retirement, will and should and mostly must be different to the advice they give to a younger man in the earning prime.
The former should be looking for income while protecting capital and the other would typically be looking for capital growth.
If the broker gave identical advice to two very different people at different points in the lives and different objectives then that would be wrong most of the time.
ShadownINja said:
DonkeyApple said:
ShadownINja said:
Them's proper professionals, innit.
Depends. You would actually expect something like this if they are proper brokers.The service and advice that they supply to an older woman approaching retirement, will and should and mostly must be different to the advice they give to a younger man in the earning prime.
The former should be looking for income while protecting capital and the other would typically be looking for capital growth.
If the broker gave identical advice to two very different people at different points in the lives and different objectives then that would be wrong most of the time.
If you are taking advice from a broker then that advice cannot be blanket to all clients unless all clients have been approved under identical 'suitability' tests. The tests have to take into account, assets, age, experience and also what the client themselves are looking to achieve.
It would be unusual to place a young man in the same risk and investment catagory as an older woman.
The joys of regulation
But it least it stops the old trick of telling half your clients to short BP and the other half to go long.DonkeyApple said:
ShadownINja said:
DonkeyApple said:
ShadownINja said:
Them's proper professionals, innit.
Depends. You would actually expect something like this if they are proper brokers.The service and advice that they supply to an older woman approaching retirement, will and should and mostly must be different to the advice they give to a younger man in the earning prime.
The former should be looking for income while protecting capital and the other would typically be looking for capital growth.
If the broker gave identical advice to two very different people at different points in the lives and different objectives then that would be wrong most of the time.
If you are taking advice from a broker then that advice cannot be blanket to all clients unless all clients have been approved under identical 'suitability' tests. The tests have to take into account, assets, age, experience and also what the client themselves are looking to achieve.
It would be unusual to place a young man in the same risk and investment catagory as an older woman.
The joys of regulation
But it least it stops the old trick of telling half your clients to short BP and the other half to go long.
But what if half your clients are old women and the other half ShadownINja said:
DonkeyApple said:
ShadownINja said:
DonkeyApple said:
ShadownINja said:
Them's proper professionals, innit.
Depends. You would actually expect something like this if they are proper brokers.The service and advice that they supply to an older woman approaching retirement, will and should and mostly must be different to the advice they give to a younger man in the earning prime.
The former should be looking for income while protecting capital and the other would typically be looking for capital growth.
If the broker gave identical advice to two very different people at different points in the lives and different objectives then that would be wrong most of the time.
If you are taking advice from a broker then that advice cannot be blanket to all clients unless all clients have been approved under identical 'suitability' tests. The tests have to take into account, assets, age, experience and also what the client themselves are looking to achieve.
It would be unusual to place a young man in the same risk and investment catagory as an older woman.
The joys of regulation
But it least it stops the old trick of telling half your clients to short BP and the other half to go long. But what if half your clients are old women and the other half I'm beginning to get a slight feeling that the low 400s are beginning to be a bit of a floor.
I think it is fair to say that even if the latest attempt fails the market is becoming resigned to the relief well scenario and this could be mostly already priced in.
The not exactly unexpected credit downgrade also had little effect on the price this week.
The floor may be being formed by belief that much is now priced in and probably more and that if the price heads much lower or stays for a long time at these levels then a bid for the assets is a very likely scenario.
A little bit of exposure towards today would be ultimately a bet on the story improving while the market is closed over the weekend. Normally a tactic to be avoided but the risk is easy to hedge with an option, albeit the prices are crappy.
I think it is fair to say that even if the latest attempt fails the market is becoming resigned to the relief well scenario and this could be mostly already priced in.
The not exactly unexpected credit downgrade also had little effect on the price this week.
The floor may be being formed by belief that much is now priced in and probably more and that if the price heads much lower or stays for a long time at these levels then a bid for the assets is a very likely scenario.
A little bit of exposure towards today would be ultimately a bet on the story improving while the market is closed over the weekend. Normally a tactic to be avoided but the risk is easy to hedge with an option, albeit the prices are crappy.
Very hard to call.
Investor briefing today re the dividend strategy.
On the one hand investors will have daggers out if the div is cut, but on the other the extent of the cost is still so uncertain that the rainy day fund may need a top-up.
Pressure from US Senators to use a div cut to fund the clean up.
Up 16pts this morning but I expect falls following a non-committal release by the Board this afternoon.
Going short on this one with a carefully placed stop-loss.....
Investor briefing today re the dividend strategy.
On the one hand investors will have daggers out if the div is cut, but on the other the extent of the cost is still so uncertain that the rainy day fund may need a top-up.
Pressure from US Senators to use a div cut to fund the clean up.
Up 16pts this morning but I expect falls following a non-committal release by the Board this afternoon.
Going short on this one with a carefully placed stop-loss.....
Legend83 said:
As expected, non-committal on dividend.
Markets seem to be taking it well....unfortunately for me!
I was surprised to be honest. The market as a whole has come off through the afternoon and the divi news you would expect to have knocked BP, but it's just come back with the market. I thought you'd bagged a nice little weekend trade when I read the report. Markets seem to be taking it well....unfortunately for me!
The fact that it hasn't moved more than the prevailing market would seem to suggest that we are looking at a floor. The question is just how solid a one?
I've got until gone 9pm to decide whether to go long, but I'm still reckoning on a mild punt although basic rules are telling me to let it go and not carry the risk over 2 days of closed markets as I'm not going to hedge.
DonkeyApple said:
Legend83 said:
As expected, non-committal on dividend.
Markets seem to be taking it well....unfortunately for me!
I was surprised to be honest. The market as a whole has come off through the afternoon and the divi news you would expect to have knocked BP, but it's just come back with the market. I thought you'd bagged a nice little weekend trade when I read the report. Markets seem to be taking it well....unfortunately for me!
The fact that it hasn't moved more than the prevailing market would seem to suggest that we are looking at a floor. The question is just how solid a one?
I've got until gone 9pm to decide whether to go long, but I'm still reckoning on a mild punt although basic rules are telling me to let it go and not carry the risk over 2 days of closed markets as I'm not going to hedge.
Going to see where the price is at 4.25pm today and might get out to avoid the weekend gamble. Spreadbetting for my sins and made a fair paper gain having sold at 448 earlier.
Legend83 said:
DonkeyApple said:
Legend83 said:
As expected, non-committal on dividend.
Markets seem to be taking it well....unfortunately for me!
I was surprised to be honest. The market as a whole has come off through the afternoon and the divi news you would expect to have knocked BP, but it's just come back with the market. I thought you'd bagged a nice little weekend trade when I read the report. Markets seem to be taking it well....unfortunately for me!
The fact that it hasn't moved more than the prevailing market would seem to suggest that we are looking at a floor. The question is just how solid a one?
I've got until gone 9pm to decide whether to go long, but I'm still reckoning on a mild punt although basic rules are telling me to let it go and not carry the risk over 2 days of closed markets as I'm not going to hedge.
No pain, no gain.
Bought my short for a nice gain, and am now going long over the weekend at 437 with a wide stop-loss. Sitting on this now in the hope it breaches the 450 mark next week if the leak can at least be slowed....
I think given the market did not implode on the news that the dividend is still uncertain gives me confidence we have reached a base level of low-400s.
Bought my short for a nice gain, and am now going long over the weekend at 437 with a wide stop-loss. Sitting on this now in the hope it breaches the 450 mark next week if the leak can at least be slowed....
I think given the market did not implode on the news that the dividend is still uncertain gives me confidence we have reached a base level of low-400s.
I suspect the "no news" on dividends is being done to keep the US Politicians happy....I read a couple of days ago a couple of US Senators are agitating on the dividend cut. There is probably a lot of time is currently going in to educating said senators on the amount of cash BP produces.
BP don't need a rainy day fund...I think they already have £7bil of cash on balance sheet and produce £10bil of FCF a year.....which is the best part of £1bil a month. I just don't see this problem getting too big for them to handle fiscally ...I don't think they could spend £1bil a month on it if they tried. Obviously the litigation bill will be huge but that can and will take years to settle....I am sure they will settle quickly with people this situation is in danger of putting out of business but anyone else will have a long wait.
I think there is almost zero chance of an aquisition happening at these levels....it's too big for private equity/fincancial buyers and no board of another oil major will sign off buying a company with a huge unknown liability. Never mind the implications this has for there own business. There is also the problem of persuading shareholders to sell at these levels.....
BP don't need a rainy day fund...I think they already have £7bil of cash on balance sheet and produce £10bil of FCF a year.....which is the best part of £1bil a month. I just don't see this problem getting too big for them to handle fiscally ...I don't think they could spend £1bil a month on it if they tried. Obviously the litigation bill will be huge but that can and will take years to settle....I am sure they will settle quickly with people this situation is in danger of putting out of business but anyone else will have a long wait.
I think there is almost zero chance of an aquisition happening at these levels....it's too big for private equity/fincancial buyers and no board of another oil major will sign off buying a company with a huge unknown liability. Never mind the implications this has for there own business. There is also the problem of persuading shareholders to sell at these levels.....
AlfaFoxtrot said:
Aren't BP self insured? As in they've been hoarding their own cash for years for an eventuality like this?
"BP does not carry outside insurance, so will have to bear the full cost itself"....source is FT - link below.http://www.ft.com/cms/s/0/5eebc5da-546c-11df-8bef-...
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