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[Retard]

LeTim said:

To Retard. If any of those stocks dropped by 50% they'd be yielding over 12% ..... you can't rule anything out, even a meteorite impact....but that doesn't make it very likely.

Yes, but how do you tell how likely these things are?

[LeTim]

Retard said:

LeTim said:

To Retard. If any of those stocks dropped by 50% they'd be yielding over 12% ..... you can't rule anything out, even a meteorite impact....but that doesn't make it very likely.

Yes, but how do you tell how likely these things are?

Well you research the company, you examine the wider economy and the context within that company sits.

For example....

Shell is a global oil giant that is being valued as though oil is $25-30 a barrel, in the past it has had a major shock ( the reserve re-statement ) which caused a fall in the value, but nothing like 50%...it's paying a good dividend which is well covered ( plenty of cash in the bank) it's share price has barely shifted in 5 years despite the 300% increase in the value of it's main product, largely because smaller firms have been a more popular investment on the basis that they might be a target for a leveraged takeover....but rising borrowing costs make that less and less likely. So good yield, and potentially significant capital upside.

Finally any sustained fall in the share price would give it such a good yield for a low risk firm that income funds would come flooding in to push the price up and the yield back down.

...I accept that risk is inevitable....I am after all a risk manager, but to use an automotive analogy.... buying Shell is like driving a Mercedes saloon along a dual carriageway, buying a small cap exploration company is like caning a Caterham around a twisty a-road in the wet. In both cases you might crash....but that doesn't change the fact that it's far, far less likely in the former case.

[Retard]

So what are the odds of someone developing clean, practically unlimited and practically free energy over the next year?

[thewave]

LeTim

So you like Shell as a company to invest in then?

I've got holdings in BP (My largest holding) and TLW (Second largest)
I've also got Desire and Sterling Energy.

I was contemplating Shell on the basis of work they're doing off the coast of Arfica, potentially some good finds, but am not sure. Tempted to sell VOD to do it, but am worried i'll be too heavily weighted in oil.

[LeTim]

thewave said:

LeTim

So you like Shell as a company to invest in then?

I've got holdings in BP (My largest holding) and TLW (Second largest)
I've also got Desire and Sterling Energy.

I was contemplating Shell on the basis of work they're doing off the coast of Arfica, potentially some good finds, but am not sure. Tempted to sell VOD to do it, but am worried i'll be too heavily weighted in oil.

BPs a good company to hold ( I used to work for them! ) I'd be happy with either BP or Shell, although Shell has much more exposure to oil sands than BP. BP has a very good set of assets off Angola, Shell have Nigeria ( risky place though ). Really I see them as equivalents.

To be honest I wouldn't want to be too concenrated in any area right now. I'm in a spread of large caps that pay good dividends at present, very conservative. Because I'm very concerned about the state of the economy. I've got some VOD too by the way.

[thewave]

LeTim said:

thewave said:

LeTim

So you like Shell as a company to invest in then?

I've got holdings in BP (My largest holding) and TLW (Second largest)
I've also got Desire and Sterling Energy.

I was contemplating Shell on the basis of work they're doing off the coast of Arfica, potentially some good finds, but am not sure. Tempted to sell VOD to do it, but am worried i'll be too heavily weighted in oil.

BPs a good company to hold ( I used to work for them! ) I'd be happy with either BP or Shell, although Shell has much more exposure to oil sands than BP. BP has a very good set of assets off Angola, Shell have Nigeria ( risky place though ). Really I see them as equivalents.

To be honest I wouldn't want to be too concenrated in any area right now. I'm in a spread of large caps that pay good dividends at present, very conservative. Because I'm very concerned about the state of the economy. I've got some VOD too by the way.

I remember reading about the oil sands. In fact it's Nigeria that's interesting. Addax Petroleum on the Canadian SE are involved down there, and I've got a small investment in them. They've also got Gabon and are looking further at Cameroon.