There’s a temptation (read: greed) to jump into BP’s stock now that oil isn’t spewing freely into the Gulf, but that’s not a wise play.
Listen to enough financial TV or radio programs and you’re likely to hear at least a couple of “analysts” suggesting that BP is a good play. After all, it’s down tremendously off its 52-week lows and the oil spill disaster is over, right? Not so fast. Here are seven reasons why you might want to put your money elsewhere.
1. CNN Money has an article up today saying that the government fines could add up to $18 billion.
2. The Obama administration has said that there’s no “cap” on the BP’s liabilities.
3. BP continues to sell assets. Reuters is reporting that BP will be selling an additional $1.7 billion in assets to Pakistan and Vietnam.
4. Civil suits could go on for some time. BP established a $20 billion fund to compensate victims, but will that be enough?
5. This was the largest spill in U.S. history. The political climate is tense and many have called for criminal prosecutions. Is this really a company you want to invest in right now?
6. According to a L.A. Times article, Halliburton allegedly reported a major gas leak to BP before the Deepwater Horizon exploded in April. Expect more “I told you so” news to come out in the future. And here’s a NY Times article about a well site leader, Ronald Sepulvado, who reported a leak to company officials before the blast—BP kept drilling anyway.
7. BP has lost 100 million to 200 million gallons of oil—probably depleting the reservoir.
These are just some of the latest issues surrounding BP and the Gulf oil crisis. Greed can cause you to do some pretty foolish things, like buying BP stock. But, it’s your money.
My name is Jason A. Martin. I'm an investor/trader, financial writer and entrepreneur. This is my blog. I also run a social media integration & cross-media design company. If you'd like to follow me on twitter, here's the link: Jason A. Martin
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My name is Jason A. Martin and this is my investment blog. Back in Jr. High School I fell in love with an electrical wiring company's stock on Wall Street. After following the stock daily in the papers—the Internet wasn't around back then—I sent them a letter and they sent me back all sorts of wonderful information about their company.
In High School, we had a stock market contest. All the kids were picking companies that made stuff they consumed. When I announced my beloved company, I was laughed at. Little did they know that my company was going to be the subject of a takeover soon.
Long story short, I won the contest and have made money in the stock market, through real estate investing, currency trading and so forth.
I hope you enjoy Financial Rebel. If you do, please leave your comments and share this site with those you know.
Jason
2 Comments
BP chief executive Tony Hayward today may resign
aspyun
8/14/2010
The stock is currently near one of its all time lows. Since I am buying this stock online and I don’t pay huge commissions for stock trading, it seems like a safe gamble.
Real Estate Attorney Miami Beach
6/7/2011
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