Pretend I made a clever joke about what "BP" stands for.
As mentioned earlier, I’m no longer buying stock on a schedule. I’m buying it when I see a deal, just like Warren.
Small problem: I don’t know how to recognize a deal.
So far that hasn’t stopped me from trying. And I continued yesterday by acquiring — at least by TBB standards — a large amount of BP.
(And I can’t tell if this is delicious irony or just regular irony or Alanis Morissette non-irony, but the irony of buying stock in a company responsible for destroying Jimmy’s treasured Gulf is not lost on me. I’m sorry, Jimmy. It’s not personal. OK, just a little bit.)
If I had them, I would point out the legitimate reasons for my BP acquisition. Here instead are some things to distract you from the lack thereof:
- BP’s stock price is half what it was a month ago. Its P/E is under 5. It’s lost $90 billion in shareholder value. Is this legitimate? Or is it — cue heavy piano chords of doom — an Irrational Market?
- Fine, there will be a hit for cleanup. I bet this will be capped (not unlike Deepwater Horizon, ZING). BP also has insurance. And lawyers. (Or barristers, whatever.) Even with liabilities raised to $10B it only equals BP’s annual dividend. This is a company that makes nigh-on $30B in profit a year according to the British 10-K equivalent I just read. (Note: British 10-K equivalents are very cute — they have Simon drawings in all of the margins.)
- Am I risking that BP will go bankrupt? Sure. I’m just betting that won’t happen. Based on SCIENCE.
- Will its stock continue to go down? Maybe. And if it does: I am buying more. I will ride BP all the way down, like uncle Tony’s yacht.
Excerpt from BP's annual report.
Do I feel bad about this? I dunno. Do you drive a car? Heat your home? Love your children? The world runs on oil. I can dislike that fact, but can’t ignore that I’ve richly benefited from liquified dinos. All those lawnmowers growing up didn’t push themselves. Plus: I’m not going to change that by not buying BP. Anyway, when I’ve made enough from my BP investment I will buy a Tesla and even things out.
Changing the subject
I also bought some more Smithfield (SFD) yesterday, doubling my bet at 80% of the price of my initial purchase. I am either throwing good money after bad or– yeah, I’m probably just doing that. But this morning — note, after my sage purchase — came news that Brazil’s JBS (the world’s largest meat producer, of course — how else do they keep those churrascarias stocked?) is perhaps back on the hunt for SFD. Anyway, I remain long on pork and was buoyed by better numbers from Smithfield last quarter. So I bought more.
(I’ve got it: Brazilian Porkquisition. Yes? No?)
