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Up until today their stock price was down 25% from a month ago. He's pretty clearly betting that the short-term damage to the stock from the media coverage is j

Up until today their stock price was down 25% from a month ago. He's pretty clearly betting that the short-term damage to the stock from the media coverage is just a blip in the long-term outlook of a pretty successful company.

sbierwagen 16y ago
One might quibble that the long term outlook of an oil company are perhaps not the best. Of course, they've got the alternative energy division, which had $5 billion in sales in 2008. Pity it operated at a net loss, costing BP one and a quarter billion dollars.
- brown9-2 16y ago
  well, "long term" as in next few years, not 50 years.
  - sbierwagen 16y ago
    Your definition of long term is "the next few years"? Even so, the near future prospects of BP aren't terribly good either, what with the crashing price of oil, (good for us, bad for oil companies) the numerous civil lawsuits and (singular) criminal investigation resulting from the oil spill, and the prospect of a moratorium on offshore drilling, coupled with additional regulation.
- RyanMcGreal 16y ago
  The more scarce oil gets, the more money oil companies will make selling what's left.
- amalcon 16y ago
  That's just it, though: the long-term outlook is irrelevant. The relevant part is the difference between the long-term outlook and what actually happens in the long-term. This is what speculative investment (which is what he's doing here) is all about: capitalizing on the difference between what is expected and what actually happens. This is also why non-professionals (like myself) should not make purely speculative investments. You really need to have a finger on the pulse of expectations, in addition to what's actually going on.
stingraycharles 16y ago
Exactly. It's not like BP suddenly is a different company; they're just experiencing some bad publicity, and have some costs for cleaning up an oil leak. Sure, that should make their company less valuable, but there's no way BP has suddenly shrunk 25%. So either they were overvalued before, are currently undervalued, or a combination of both.
- shalmanese 16y ago
  A lot of BP's value was tied up in it's brand as the greenest oil company of the lot. Now that that brand value has become significantly eroded, it's not implausible to suggest that BP has indeed lost 25% of it's value.
pbhjpbhj 16y ago
He's also just told everyone of his millions of readers to by BP, even at a small percentage uptake the prices should lift a little now? Once they start rising then people will think it's for a good reason. Basically I think he's gaming the market ;0) At least for today he won 3.5-5% on his gamble depending on the exchange.
pchristensen 16y ago
Ditto for the recent Toyota brouhaha.

sbierwagen 16y ago

One might quibble that the long term outlook of an oil company are perhaps not the best. Of course, they've got the alternative energy division, which had $5 billion in sales in 2008. Pity it operated at a net loss, costing BP one and a quarter billion dollars.

brown9-2 16y ago
well, "long term" as in next few years, not 50 years.
- sbierwagen 16y ago
  Your definition of long term is "the next few years"? Even so, the near future prospects of BP aren't terribly good either, what with the crashing price of oil, (good for us, bad for oil companies) the numerous civil lawsuits and (singular) criminal investigation resulting from the oil spill, and the prospect of a moratorium on offshore drilling, coupled with additional regulation.
RyanMcGreal 16y ago
The more scarce oil gets, the more money oil companies will make selling what's left.
amalcon 16y ago
That's just it, though: the long-term outlook is irrelevant. The relevant part is the difference between the long-term outlook and what actually happens in the long-term. This is what speculative investment (which is what he's doing here) is all about: capitalizing on the difference between what is expected and what actually happens. This is also why non-professionals (like myself) should not make purely speculative investments. You really need to have a finger on the pulse of expectations, in addition to what's actually going on.

stingraycharles 16y ago

Exactly. It's not like BP suddenly is a different company; they're just experiencing some bad publicity, and have some costs for cleaning up an oil leak. Sure, that should make their company less valuable, but there's no way BP has suddenly shrunk 25%. So either they were overvalued before, are currently undervalued, or a combination of both.

shalmanese 16y ago
A lot of BP's value was tied up in it's brand as the greenest oil company of the lot. Now that that brand value has become significantly eroded, it's not implausible to suggest that BP has indeed lost 25% of it's value.

pbhjpbhj 16y ago

He's also just told everyone of his millions of readers to by BP, even at a small percentage uptake the prices should lift a little now? Once they start rising then people will think it's for a good reason. Basically I think he's gaming the market ;0) At least for today he won 3.5-5% on his gamble depending on the exchange.

pchristensen 16y ago

Ditto for the recent Toyota brouhaha.