Several months ago I was discussing with my broker what to do with 401k money that I had rolled over to him from a previous job. I told him that I was really interested in the environment and that I think “green” investing is going to be the next big thing… I said “before I retire people will realize we have to do lots of things better.” He suggested alot of big name funds that were heavily invested in oil, especially BP (stock symbol: BP ADR). Now first have to admit I was taken by BP’s green washing ads (Click here for BP website) and they had some effect on me but I still said no. My real reasoning was if alternative energy was going to grow it would likely be at the expense of the oil companies rather than the innovation of the oil companies. He said every fund has oil in it… to my response I said “there has got to be a hippie out there with a fund that does not have oil in their portfolio.” I am at least 95% sure he hung up the phone with me and thought I was insane. He got back to me with a fund that I will write about at a later time that did not invest in any oil. I said I will invest in that.
Had I listened to him I quite sure I would have been holding significant amounts of BP shares and would have lost about 50% of my investment in BP alone. Today it closed at exactly half of it’s 52 week high (below is a one year chart of the stock price). Obviously the amount I could have lost is exactly 50% but no one can argue I missed out on a chance to make alot of cash!
I cannot see how the stock can rebound to any respectable level and to be honest I can see alot more situations where it will go down further… hurricane hits the gulf moving the oil around, oil hits the current that would bring the oil to the eastern seaboard, they try to cap the well but end up collapsing the sea floor dumping even more oil into the water in a completely uncontrolled way… we can get more catastrophic but I think you get the picture. People are already boycotting their local BP station, I have read many peoples argument that this will not affect BP I argue it will (in my town the closest gas station are Exxon and BP… talk about a moral dilemma, I still remember the Valdez).
While I am not a stock broker or even a well educated investor, my common sense guided me away from this stock and for that I am thankful.