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KDave

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  1. Like
    KDave got a reaction from Roy in My first trade - Shell / BP   
    A bullish article for oil, not so much for the dreamers;
    https://seekingalpha.com/article/4382875-clean-energy-vs-oil-gas-biggest-lie-of-2020
     
  2. Like
    KDave reacted to Roy in My first trade - Shell / BP   
    Gentlemen, please.
    https://dictionary.cambridge.org/dictionary/english/cheque
  3. Like
    KDave reacted to Bumble in Chart Of The Day thread   
  4. Like
    KDave reacted to Kman in My first trade - Shell / BP   
    I need to learn about the ECB and their bond purchases, big part of the picture I'm currently missing 
    I can't remember the reasoning but I've seen it reported US stimulus isn't likely now until 2021, I'm not sure if that means an agreement wont be reached or checks wont be sent out until then
    As posted earlier evictions and loan deferral will lapse by January, if they aren't extended a lot of stimulus checks could just go towards debt so become moot 
    If people in Europe are getting stimulus checks(?) and they spend them instead of saving or paying off debt that could flood the market with new euros and strengthen the dollar over the next several months
    On the other hand If the elections go iffy and are disputed that uncertainty might hurt the dollar
      
    Tradingview
  5. Like
    KDave reacted to Kman in My first trade - Shell / BP   
    You could forget the bottom but it depends how far away a shift in trend is, BT could go up 40% and it still wouldn't be out of a multiyear downtrend
    In an ideal world (assuming you're comfortable with your knowledge about BT as a company and the market they're in) if this does turn out to be the final bottoming pattern you could buy on the breakout,  hold it until it tests the trend line ~40% up and then see if it can break out and evaluate from there 

     
    My guess would be because of current economic conditions and the likelihood of another market crash this wont turn out to be the bottom
    Vix just broke out

     
     The dollar just broke out

    Silver just broke down
    We seem like we might be headed into a new interesting patch 
  6. Like
    KDave reacted to Kman in My first trade - Shell / BP   
    Q2 2019 Shells revenue was 85.6b but their net income was only 2.99b, that was with high demand and $50+ a barrel 
    When margins are tight like that you can't say only 10% because that's the difference between them making money or losing billions; that along with oil prices being in the gutter meant they lost -18 billion in Q2 2020 - Shells net income in all of 2019 was $15,8b and they lost -18b in one quarter
    They obviously restructured and their Q3 very good with a $955 net income, shows they can not only ride out lower demand and $40 oil but still be profitable
    That was without lockdowns though, now Europe is starting to close up again at a time oil production has started to increase will we see a build up of oil in storage again that's going to need to be worked through? is that going to supress oil prices further? 
    The best thing about oil stocks is that we can guess all we want what will happen next but we will know exactly when things have switched more positive because we will see it in the stock prices and volume
  7. Like
    KDave reacted to Stu in My first trade - Shell / BP   
    https://247wallst.com/energy-economy/2020/09/15/iea-again-cuts-2020-crude-oil-demand-estimate
     
    oil use down only 10% even when a big chunk of world was in lockdown. I don’t see that going down much more if we return to this. Still need oil for public transport, goods , food production etc.  Market sentiment is another beast altogether,
  8. Like
    KDave reacted to Kman in My first trade - Shell / BP   
    I think the best thing to do is learn basic technical analysis if you haven't been looking into it already
    It makes everything much clearer and more simple, where to enter, where to sell - you can draw in trend lines that last months/years and if they stay above that line you're in, if they fall below look into why and maybe you're out
    Some charts are more simple to look at than others and understand, @KDave likes BT and that's a more difficult one
    What do you see when you look at it?

    I originally saw something different but now I have more experienced looking at charts I broadly see this (you could replicate that line more and it fits in, but just want to give an idea of a bottom and top)

    More zoomed in a see this

     
    Price since August stabilised between a 15% range of ~97 and ~112, could this be a bottoming pattern after years of downtrend? maybe
    Is there any point buying now? no, might as well wait to see if it can break out and establish itself above 112, if so and you're interested in buying then that would be the time, maybe with a modest stop loss and just leave it to see what it can do; fingers crossed it was the bottom of a multi year bear trend and you just got in on a multi year bull trend to the upside with tremendous profit 
    If instead the bottom of 97 doesn't hold no worries, keep an eye on it and see how things develop
     
  9. Like
    KDave got a reaction from HighlandTiger in My first trade - Shell / BP   
    Bonds might get one last go, but they will not do well when the QE resumes. 
  10. Haha
    KDave got a reaction from HighlandTiger in My first trade - Shell / BP   
    The only issue I have with Shells increased dividend;
    16.65p per quarter x 4 = 66.60p annual 
    Bill Gates is that you? 
  11. Like
    KDave reacted to Kman in My first trade - Shell / BP   
    https://news.sky.com/story/coronavirus-germany-to-enter-four-week-lockdown-from-november-chancellor-merkel-confirms-12117056
    Germany and France are going into national lockdowns, Frances seems pretty nuts based on that article
    "Anyone outside their homes will have to carry a document justifying their excursion, which can be checked by police. The newspaper Le Parisien said the office of the French Prime Minister has confirmed that people will be allowed only up to 1km from their home."
    Incredibly draconian, I imagine lockdown protests and riots are going to become more prevalent and serious as time goes on
    This will be bad for oil stocks - should be bad for market on the whole but banks and oil seem like the only ones really tethered to reality; maybe as stimulus isn't flowing as freely the others might join them. 
     
     
  12. Like
    KDave got a reaction from Kman in My first trade - Shell / BP   
    I have found another article going into detail as well, a good read;
    https://climateriskreview.substack.com/p/buying-time-bps-sideways-approach
    "One especially attractive feature of these instruments is their yield. Because the principal never has to be repaid, BP has to pay investors more than it would for “normal” senior bonds. One $2.5 billion slug of the dollar-denominated perpetual debt will pay 4.4% over the first five years before reverting to a lower rate linked to US Treasury securities. Another $2.5 billion will pay 4.9% for 10 years.
    Compare that to the 2.8% rate paid on $1 billion of senior secured notes sold by BP last May. With rates the world over at rock bottom because of the coronavirus-induced economic crisis, the coupons on these perpetual notes can’t help but be tempting."
  13. Thanks
    KDave reacted to Kman in My first trade - Shell / BP   
    I looked into this a bit last night, I read an article here -  https://www.investorschronicle.co.uk/tips-ideas/2020/06/19/what-bp-s-hybrid-bond-sale-means-for-shareholders/ 
    Says things like "it is also a reflection that BP is facing very difficult times, as these securities are expensive compared to senior unsecured debt"
    I also found this website with a little information about the bonds - https://cbonds.com/bonds/745015/ this one is 2.5 billion USD @ 4.875% which seems quite high 
    BP PLC, 3.625% perp., EUR - 2.25b BP PLC, 4.25% perp., GBP - 1.25b BP PLC, 4.375% perp., USD  - 2.5b BP PLC, 4.875% perp., USD - 2.5b BP PLC, 3.25% perp., EUR - 2.5b All together it's  about $12 billion usd @ 4.075%
    So it's about  $480 million a year for these, but I'm not sure if the 12 billion they got allowed to them to do anything else to lower other debt payments so maybe it's not just an additional 480 on top of whatever they paid before 
  14. Like
    KDave reacted to Roy in My first trade - Shell / BP   
    At the beginning of the year, BP was 4.97.
    £2.02 is a gift!
    As a gold investor HT, you should know better! 😋
  15. Like
    KDave reacted to HerefordBullyun in My first trade - Shell / BP   
    I'm waiting for BP to go below 1.80 although it's great entry point now I think. But it's going to be a bumpy ride
  16. Like
    KDave reacted to Stacktastic in My first trade - Shell / BP   
    Ah got you. Yes I meant bad timing as I made a bad assumption it was about to go up. I cost averaged too often & don't really have enough funds too continue. Not somehting I have replicated since.  so i have leant my lesson. 
  17. Like
    KDave got a reaction from Kman in My first trade - Shell / BP   
    https://www.investopedia.com/terms/h/hybridsecurity.asp
    Good question, it looks like normally a hybrid is debt that can be converted into equity. For existing share holders its an ongoing threat of a placing, which is otherwise just more debt. For the bond buyer its a secure way of investing in a company (lenders are paid first in bankruptcy) that pays a guaranteed a decent yield, with option to convert to shares? I can't find the details anywhere for BP, it looks like 3.5% yield for the bond holder. Its only brief mention in Q2, I didn't pay it much attention at the time; 
    https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-second-quarter-2020-results.pdf
    "Updates to significant accounting policies, Hybrid bond issuance: On 17 June 2020, a group subsidiary issued perpetual subordinated hybrid bonds in EUR, GBP and USD for a USD equivalent amount of $11.9 billion. As the group has the unconditional right to avoid transferring cash or another financial asset in relation to these hybrid bonds, they are classified as equity instruments and reported within non-controlling interests in the condensed consolidated financial statements. The contractual terms of these instruments allow the group to defer coupon payments and the repayment of principal indefinitely, however their terms and conditions stipulate that any deferred payments must be made in the event of an announcement of an ordinary share or parity equity dividend distribution or certain share repurchases or redemptions." 
    Looks like these are more bond than share, in that BP does not have to transfer cash (I read as repayment of principle) or financial assets (I read that as placing of shares) to the bond holders. These bonds are open ended in that BP can defer the principle repayment indefinitely, and can defer interest payments. BP can only defer interest payments until a dividend or share repurchase is announced. If I am reading into that right, this gives BP the option of breathing room on coupon payments linked to the dividend. A lever to pull, if its cancels the dividend then it can stop the coupon payment until they are both restored. In return the bond holders get 3.5% yield which will be paid as often and for as long as a dividend is paid. But they will not see a share nor will their principle be repaid. Seems quite a risky product for the buyer, perhaps there is more to it or I am reading into that incorrectly.
    Perhaps BP are refinancing at lowish interest rates for the long haul while they can. That yield is pretty low given the flexibility offered to the company. I have not found much to go on, I would like to see the details from the bond holder perspective to see if its a good deal for them beyond the yield, because if inflation picks up even at that yield this is still a better deal for BP than the bond holder. If I have this right its a great move; 11.9 billion in perpetual long debt at only 3.5% which can be turned off with the dividend (in a disaster scenario)?
  18. Like
    KDave got a reaction from Kman in My first trade - Shell / BP   
    https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-third-quarter-2020-results.pdf
    BP quarterly results, a minuscule profit, some debt paid off, dividend being paid for now. They have stopped bleeding at realised average WTI $40.91 and Brent $42.94, if we see much lower than those markers then and they will struggle all being equal. Although not good for BP short term we could do with sub $40 oil prices for a few months ideally to make a big difference long term, the lower it goes now the higher it goes later. 
    "In the quarter, net debt reduced to around $40 billion and our cash balance point was around $42 Brent, despite weak refining margins, low gas prices, reduced product demand and the payment to Reliance. Funding the dividend remains our first priority and we are confident in moving towards our $35 billion net debt target, supported by value accretive divestments." 
  19. Like
    KDave got a reaction from Cornishfarmer in My first trade - Shell / BP   
    There is a joke that an investor is just a successful speculator. The joke can only be true if you confuse gambling with investing, in which case, jokes on you. Say you put £10,000 into opening a business in a product you are sure will do well, that business goes on to make £20,000 - was it a successful gamble? Or was it an investment? Which best describes it. The same process is happening when you buy into a company on the stock market for the same reasons, the share price is the price of entry. Do you want to pay more to set up the business/position due to a high share price? Or would you rather pay less to set up? Keep the ideas about gambling and investing separate, as they are not the same thing. If you are trading solely on a share price movement then you can say you are speculating/gambling, because as we have seen over 2020 the short term movement of share prices often have little to do with either the long or short term realities and prospects of the business or the economy.
    You are right to lose faith in commentators, just use them for information and then you don't need to work out what angle they are working because its then irrelevant to you. Personally I share what I am doing here and elsewhere to hold myself to account and test my ideas out. I think perhaps some of the commentators I follow do that as well, but who cares, I am only listening not really following despite the social media terminology. Perhaps there isn't much difference.    
    Parts of the market, especially the US market are overvalued by many metrics, other markets such as the FTSE are not. Look at the difference between what is in the NASDAQ and what is in the FTSE 100 as an example of where the money is going. FTSE 100 is heavy into materials, mining, oil, etc. US markets have trimmed oil and gas in some cases (was it the DOW that cut oil and gas? I forget). We may get a crash like March, we might instead get a rotation into value and materials, we may get the big one like 2007 or 2000. Who knows. There are a lot of people in on the reflation trade right now from what I am reading, it is quite possible we will see a good shake out of the weak hands before things turn around next year. In the case of the oil price, the lower it goes now, the higher it goes later. 
  20. Like
    KDave got a reaction from HerefordBullyun in My first trade - Shell / BP   
    There is a joke that an investor is just a successful speculator. The joke can only be true if you confuse gambling with investing, in which case, jokes on you. Say you put £10,000 into opening a business in a product you are sure will do well, that business goes on to make £20,000 - was it a successful gamble? Or was it an investment? Which best describes it. The same process is happening when you buy into a company on the stock market for the same reasons, the share price is the price of entry. Do you want to pay more to set up the business/position due to a high share price? Or would you rather pay less to set up? Keep the ideas about gambling and investing separate, as they are not the same thing. If you are trading solely on a share price movement then you can say you are speculating/gambling, because as we have seen over 2020 the short term movement of share prices often have little to do with either the long or short term realities and prospects of the business or the economy.
    You are right to lose faith in commentators, just use them for information and then you don't need to work out what angle they are working because its then irrelevant to you. Personally I share what I am doing here and elsewhere to hold myself to account and test my ideas out. I think perhaps some of the commentators I follow do that as well, but who cares, I am only listening not really following despite the social media terminology. Perhaps there isn't much difference.    
    Parts of the market, especially the US market are overvalued by many metrics, other markets such as the FTSE are not. Look at the difference between what is in the NASDAQ and what is in the FTSE 100 as an example of where the money is going. FTSE 100 is heavy into materials, mining, oil, etc. US markets have trimmed oil and gas in some cases (was it the DOW that cut oil and gas? I forget). We may get a crash like March, we might instead get a rotation into value and materials, we may get the big one like 2007 or 2000. Who knows. There are a lot of people in on the reflation trade right now from what I am reading, it is quite possible we will see a good shake out of the weak hands before things turn around next year. In the case of the oil price, the lower it goes now, the higher it goes later. 
  21. Like
    KDave reacted to HighlandTiger in My first trade - Shell / BP   
    I like that scenario. Fill my boots in the next few months with some cheap stock, and then reap the benefits.
  22. Like
    KDave reacted to Kman in My first trade - Shell / BP   
    I've heard people say the s&p500 could be in a very large megaphone pattern and it does match up 
    The top is about +4% and the bottom is -40% 
    No idea if this will be prove to be of any relevance but if I throw enough ___ at the wall something will stick and I can say "ahh see, I was right" lol 

     
  23. Thanks
    KDave got a reaction from HerculeHolmes in My first trade - Shell / BP   
    Shell will make returns over the next few years in accordance with rising oil and gas prices. The market thinks oil is dead about 30 years too early hence the market gift of £9 shell and £2 bp (insane yield on BP at this price).
    Returns depend on how high oil goes, for shell $60 oil is $20 billion free cashflow, at $70 its $30 billion, so on and so forth. When inflation picks up oil will be 3 digits mid decade, I expect new all time highs. Depends on how low it goes and how long it stays there over the next few months. 
  24. Like
    KDave reacted to HerculeHolmes in My first trade - Shell / BP   
    I've put £1,200 into Royal Dutch Shell because it sounds like a safe enough investment  (I at least don't expect to lose money on it) but really I have no idea how much it's going to be worth 5 or 10 or 15 years from now. Will it go back up to it's old 2018/2019 value, or will it NEVER return to that level?
  25. Like
    KDave reacted to JunkBond in My first trade - Shell / BP   
    Bought more BP at just under 200 earlier today.
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