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Bye Bye BP

June 2nd, 2010 at 06:54 am

I don't know if anyone remember this, but I been dabbling with BP stocks a little while back. And with it, I think I've also learned where my true risk tolerance is, and it's about where BP is right now. Big Grin

How did I know that BP was my limit? Although I didn't lose sleep over it, it was also the last thing I thought of when I went to bed, and the first thing I thought of when I woke up. I even had to resist checking the pre-market trading and the news updates before brushing my teeth. Suffice to say, I was a little anxious. Big Grin And that's when I realized that, no matter WHAT the trading strategy is, it's still Not Worth It!

Considering that it also ended in a loss, I'm obviously not happy with my BP trades. Fortunately, the loss is minimal to the overall portfolio, but it's still an expensive learning lesson.

2 Responses to “Bye Bye BP”

  1. Single Guy Says:

    I remembered you mentioning the purchase, and wondered how you felt about it lately. I would hate to bail at this point, but you gotta do what you think is right. I was considering for a bit if it worth buying at the new prices, but... I think its best if I just stay away.

  2. Broken Arrow Says:

    Well, as far as volatility goes, there is certainly no shortage of it in this stock. So, there are ample opportunities to win big and lose big. I've actually dabble with BP several times already. This time, I lost money, but last time, I made money. So, I came out even overall.

    But yes. Unfortunately, I did bail for a very human reason. Stock trading in general is already a very risky kind of financial exercise, and to trade BP is like slamming your foot all the way down the accelerator pedal, and trying to drive around like that.... While market volatility does not bother me most of the time, I do think every human being also have a limit. I believe that there is wisdom in knowing both your capabilities as well as your limits, and I have to draw the line when it starts to creep into my sleep. Big Grin

    BP, right now, has too many question marks. The only certainty is that they're facing a huge challenge not just to cap the oil, but litigation as well, oh and there's a small matter of an ecological disaster as well as the destruction of the gulf coast fishing industry. BP is going to be held accountable for all that.

    BP may seem like a tremendous value right now, but it's also looking more and more like a value trap as well. You can probably day trade it on pure technicals, but fundamentally (which is how I trade), it just doesn't make any sense when there are clearly much better stocks out there to play with.

    However, BP notwithstanding, the energy space is looking very attractive because of this though. Competitor oil companies such as XOM and COP are interesting to me, and they're not ADR either. Actually, so are oil ETFs such as USO. The entire sector is just beaten down due to this, but are themselves not directly responsible for the disaster. In fact, tighter regulations and even temporary bans on oil in light of potentially increasing demand ultimately equates to a good bullish story for oil in general, so long as it's not BP.

    But for those who may already be holding a bunch of BPs, and are willing to wait it out, I say hold it for another 5 years or so. This Too Shall Pass, and in the meantime, just enjoy the dividends, which BP has promised that they are not going to cut. But as for me, I'm a trader when it comes to individual stocks. I look at anywhere from days to months, not years. So, that's why I'm out.

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