This morning, BP was trading between $30 and $31 per share, down more than 50% since the oil spill in the gulf began. My "stupidly cheap" valuation was based at $33 per share but there is a slight monkey wrench thrown into the equation: The United States Government is exerting as much pressure as possible on the Board of Directors to stop future dividend payments. One of the valuation assumptions built into the model was something known as "dividend yield support". If a dividend is … [Read more...]
BP Falling Fast and Furiously
May 23, 2010 By 8 Comments
Did you all see BP has lost 20% of its value since I first start buying it? Oh, please, please please hit $31.94 per share. Please. That would result in 5x operating profit on a regularized basis. Even if it took five or ten years to get back to normal, that's a hell of a discount. I told you these things were risky. That's why our derivatives don't expire until 2012. I'm not going to get my hopes up ... but, still ... just imagine that kind of valuation. … [Read more...]
Foreign Stocks or ADRs …
May 9, 2010 By 2 Comments
I have been thinking about our BP position over the past few days. In fact, once I have gone through a few more years of back reports, I would even consider adding it to the blue chip reserve portfolio as an outright stock holding purely for the dividend income. But that got me thinking ... BP is a foreign stock that is traded on the London Stock exchange and is denominated in pound sterling currency. Would we buy the American Depository Shares that are traded in the United States and … [Read more...]
Today Was a Day for the Stock Market Record Books
May 6, 2010 By 3 Comments
I took the day off, spending most of it playing video games. About 4:30 p.m., my dad gets in touch with me by calling Aaron, who tracks me down and hands me the phone. It seems that the stock market had been in total chaos, setting an intra-day volatility record, and he had been frantically trying to get me on the phone as I blissfully drank coffee, read, and thought about our sporting goods businesses, completely oblivious to what was going on (we're value investors - I didn't get here just … [Read more...]
I'm a private investor who loves architecture, furniture, clothes, history, philosophy, books, cooking, and music as much as I do finance. 
