Okay, I bought back into the BP stock again.
First, the stock went down 10% from where I cashed out. While 10% isn’t quite the percentage that I was hoping to buy back in at, I tried to gauge how far the stocks would go down. How did I do this, you might ask? I found something as close as possible to this disaster, and that was the Exxon’s “Valdez oil spill“. Exxon’s stock went down a little, but not much more than a few percentage point. What about the Exxon dividend? Was it affected…? Nope, Exxon continued to pay it out.
Second, sometimes a company or a person gets lucky. So far, nature has worked in BP’s favor. The winds are blowing in the right way, the waves have settled. More than just BP is participating in the cleanup, many other companies and countries have offered to help. While BP has had good luck to date, that doesn’t guarantee anything, but it’s still encouraging, hopefully BP and the US’s luck holds out.
Third, they are trying a funneling system that if BP can get it into place can stop or drastically reduce the continued outflow of oil into the ocean. The funneling system has been done in shallower waters, so whether it will work or not a mile down in the ocean is still in question.
So my decision to buy back into the stock, like my decision to sell out of the stock is based on a gamble. Is this good investing? No, but I’m only playing with money that I can afford to lose (but, I really don’t think BP will go under…).
Anyway, I really hope that the funneling system works! If not, it will be horrible for Louisiana, Florida and the entire Gulf of Mexico.
UPDATE: Wow, the DOW fell 1000 points in practically less than 1 hour! It ended the day down 347.80, but wow. Apparently, there was a glitch in the system. One stock went from $40 all the way down to 1 cent, then back up to almost $40.
UPDATE: (5/10/2010) Yes, the funnel failed, so I jumped back out of BP. Enough oil has spilled out that I’ve decided to lick my wounds (sort of, after all I still ended with a gain because I’ve been in the stock for at least a year) and give up on BP. I may sit in cash for a while until I find something else good to invest in! The BP mess is so bad that I decided not to jump back into the stock.