Member Info for Jamesparsonage

If you want to use up this year’s allowance and stay in the game, you can always sell your BP and buy Shell. Whilst they are not exact equivalents they seem to be pretty well correlated, and as long as you keep out of BP for 31 days (I think) your CGT allowance will get used up. That’s what I plan to do at some point next month

Thank god schools back open on the 8th, finally no more of this online teaching. Just hope the kids are allowed to take part in team sports again. Also means I’ll find it a lot easier to switch off the bp share price!

Happy, as someone who thinks about these things in depth do you see a big difference in the relative recoveries and future plans of BP vs Shell? I have to admit I took the chance today of a relatively big gap in performance between the two to sell some BP (about a fifth of my holding) and buy some shell, more to balance out my exposure to risk of a critical incident than any well thought through investing strategy, but interested to hear your thoughts especially after the shell strategy announcement today. Thanks!

Saitoman, the consensus on the dreaded mainstream financial news seems to be that there is a lot of skepticism about whether the current oil price is legit due to opec decisions, and people fear there could be a 10-15 dollar drop, hence the lack of correlation with share price. No idea how true that is but it seems logical to my naive mind. In which case just wait a few months for opec to release restrictions once demand increases and people will start believing again. Fundamentally whatever market plays are happening if you believe covid will subside then the share will go up, and if it doesn’t, well we have worse things to worry about..

Although presumably most people selling are also buying so a crash shouldnt really matter so much unless you’re heading to the old peoples’ home.. As a first time buyer I’m waiting at least until stamp duty returns before looking, if this gets to 300 again I’ll be sorted for deposit+fees+stamp duty, then I can decide whether to hold for 350 to get a new kitchen lol

Hi Charles,

Yes my own suspicion is that a big move will come either in anticipation of Q1 results (if Brent stays high) or once demand increases and OPEC up production without the PoO crashing, hopefully before the summer if vaccines allow us to open up a bit. My only problem is that I have gone against all investing advice and put in money I’d quite like to use this year to buy a house (hoping that particular market crashes!), so though I am sure if I came back in 2 years I’d be a lot richer I’d rather not wait that long paying rent..

Out of curiosity what is it in the chart that looks bad? I have ordered my copy of Technical Analysis of the Financial Markets as the whole things seems fascinating to me, but I doubt I will have got through it in time for this!

I guess the thing is who knows where it will fall to? Watching along the last couple of weeks it seemed like we had some pretty strong support at 250, and the last couple of days seems like 255 is looking solid. Would be interested to hear what you view as the buying range

I know people here have no trust in mainstream financial news, but I thought this was an interesting video, JP morgan essentially saying buy BP and Shell to take advantage of a projected overshoot in the price of oil once demand returns.
https://www.bloomberg.com/news/videos/2021-02-09/the-jury-is-out-on-oil-demand-says-jpmorgan-video

I have to say after the revelations about robin hood selling stop loss data there is no way I would put a stop loss on a trading app. I do have an email alert if I get towards the bottom of my comfort zone, hopefully not as tempting to HFs!

Johnson not exactly inspiring confidence in the short term future at PMQs right now.. Looks like we’re definitely set for another round of vaccines in the autumn, hopefully that doesnt mean more lockdown..

Let’s hope so, though I’m old enough to remember a few weeks ago when it was the last chance to buy under 300..

Interesting that TUI thinks this, Grant Shapps seems to disagree.. https://apple.news/AXGo0ixeCRy-tJ-Tb3QUTUg

Potential travel ban for all until autumn announced by Grant Shapps this morning can’t be helping things.. I somehow don’t see them sticking to this

Haha enjoy your lie ins! Out with the dog right now, can confirm it is cold!

Interesting points thank you both. Certainly food for thought as I have been thinking about reducing my share in BP and increasing in shell as I am much heavier in BP right now (mainly due to the strategy of focussing on high margin barrels and the fact I felt the uptick should come sooner given the discount, something I am now reconsidering). I hadn’t really considered the other players in the renewables space in terms of competition for investment, so thanks for that. I will wait till at least shell strategy day, but certainly something to mull over, thanks

On frustrating days like these I just think about how glad I am I got out of Rolls Royce in December.. There’s a really frustrating share right now!

Happy,

Very much appreciate the posts. You, Geng, Tacet and Ceders always provide useful food for thought here.

I was just wondering what, in your opinion is causing such an undervaluation compared to peers, and if thete is a cause why we should revert to the mean in the medium term? Presumably big funds investing in other energy companies would also see the historical undervaluation, and yet it doesn’t seem to be correcting sharply.

Appreciate any insights you have

Minted “ if the BP total dividend of 0.16 is a steady dividend this would remain my calculation for these shares regardless of future deviations in the SP?”

Apologies if this comes across as slightly patronising, as a maths teacher it unfortunately comes with the territory..

The relevance of any statistical measure is ultimately dependent on the interpretation and purpose of it. So if you want to calculate your yield based purely on purchase price to calculate the profit on your initial investment that is a valid thing to do, but if you are considering reallocation of capital it might make more sense to work out yield as a proportion of current share price so you can decide whether your money would do more for you elsewhere. So it all depends on your reason for wanting to calculate yield in the first place.

Similarly for me, I have 2 concurrent definitions of average purchase price in my head for BP. If I divide the price paid by number of shares I own I get 2.75. But I have dipped in and out over the last month, so if I divide the money O started investing in BP by current number of shares I get 2.33. Now both have their uses for me, in that once we go back above 2.75 I might consider reallocating some funds (or might not), but when it drops down to 2.51 I tell myself that it’s fine, I only really paid 2.33 per share!!

Except the confusing part compared to say a bank account interest rate is that that yield is not compounded, unless you reinvest the dividend, at which point your yield had to be recalculated to take into account any share price change