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Not buying, but holding. I own barely a toe-hold, through DSPP. I've not held it long enough yet to even receive a dividend. Gonna cut? Even if they do, it might still be a dividend worth holding onto. 8% leaves quite a bit of room, if they do...
"Global refining margins, the estimated profit from turning oil into gasoline and diesel, fell 34 percent in the fourth quarter, the steepest decline in eight years, to $13.20 a barrel, data on BP Plc’s website show. Every $1 drop cuts BP’s pretax adjusted earnings by $500 million a year, according to its website.
The companies face a squeeze on processing profits as a mild winter curbs demand for heating oil and diesel, creating huge stockpiles in the U.S. and Europe. That’s a reverse from the past two years, a period when refining earnings doubled, and kicks away one of the remaining buffers for integrated oil giants grappling with crude prices at a 12-year low.
“It’s a bit of a double whammy, lower oil prices and refining margins starting to weaken,” said Iain Reid, an analyst at Macquarie Capital Ltd. in London. “The safety net is still there, but there are some holes in it now.”
This game is a long way from being over, and I don't think the oil majors are immune. It may just take a little while until they are impacted. Already, we see income-- both operating and net--- taking a hit with most of them, and if things like refining margins decline to ziltch.... well, are dvd cuts really off the table? Buy those "juicy" yields (aren't they always) and be the bag holder later. No need to rush in; patience could be richly rewarded here.
^ Yahoo Finance has a major owner link for most stocks. Shows largest holders- institutional as well as individual funds. Other web sites may give same info- have not checked.
Recall the buying and adding on this board in COP in the 60s? Not saying it's not a compelling value because frankly I haven't a clue.
A lowering of the dividend and the stock down 8% today. The board's resident analyst was really bullish on COP in the 60s. The moral is be you a trader or investor is always have an exit point. So much thought goes into when to buy yet so little on when to sell.
Poop. That's a SIXTY SIX PERCENT reduction on the damn dividend. That's not a mere reduction. That is Management spending lots of time LYING to shareholders, until today. I'll stay in long enough to collect that dividend, and take the small loss, and use the proceeds to add to my PNM. (electric utility.) What's MOST important to this investor above all else is that I don't get LIED to, or treated like dirt. I can suffer through some lousy investment periods with a fund or a single company. Just don't LIE to me.
Poop. That's a SIXTY SIX PERCENT reduction on the damn dividend. That's not a mere reduction. That is Management spending lots of time LYING to shareholders, until today. I'll stay in long enough to collect that dividend, and take the small loss, and use the proceeds to add to my PNM. (electric utility.) What's MOST important to this investor above all else is that I don't get LIED to, or treated like dirt. I can suffer through some lousy investment periods with a fund or a single company. Just don't LIE to me.
I have to admit that is a huge drop in the dividend. I would be upset, too. All we've been hearing is buy the big name energy companies as of late.
Crash, what is the lie you are referring to? You are investing in a stock. There are no guarantees on price or dividends that I know of.
Lets face it, the oil sector is in dire straights. If there are no positive earnings, it's tough for a company to sustain or even give a decent dividend. You can only lay off so many people before cuts have to be made in other areas - like dividends.
It appears this dividend is in line with what it was in 2010.
MikeM - I don't know about COP but in the case of another energy company, KMI, shareholder reports were for maintenance of the dividend at it's then current level with growth of that dividend increasing at a 10-16% clip for the next 1-2 years. A month later the dividend was cut by 75% with muted at best growth of that dividend projected. Lie. Lie. lie.
@Mark: yes, my reaction springs from the fact that all the Management lingo --- though they are of course aware of the big slump--- expressed that the dividend was solid. Shake, rinse, repeat. Now, THIS.
little5bee - I can only hope that insider selling would be too easy to spot albeit not until later. If so I expect those caught will be dealt with the same firm handslaps handed out to the financial manipulators of the housing/mortgage meltdown
Junkster said: The moral is be you a trader or investor is always have an exit point. So much thought goes into when to buy yet so little on when to sell.
To whom do you think he is addressing this advice?
I see no evidence of insider selling. The news was out on multiple wire services by 10:30 and the selling didn't begin until around 11. But if it gives you comfort to think there were nefarious insiders front-running it then so be it. With regard to THE LYING by the COP Management, was that based on guidance given in December, or from something said more recently? This is a rapidly changing story, and a lot has happened since December. As noted in my longer comment on Jan 19, there were some very bad things developing for the oil majors, things that should have caused you to consider that a big dvd cut was possible. So why express shock now, and create a list of grievances (for what end)?
Mr. Market could not give 2 sh*ts about your silly feeeeelings. Perhaps, creating imaginary insiders and perceiving corporate lying is your way of avoiding having to spend a moment to reflect on what has proven to be your unwise decision to purchase COP where you did. O.K., so what? What matters now is what you do now. If you only have a small stake as you stated above, then why in the world are you holding on for one week, to get the dvd? A lot can happen in a week, the way things are going. What if another oil major also reports terrible revenue and cuts their dvd next week? What do you think will happen to COP? Another drawdown. Maybe another 10% off your stock?
The thesis for your purchase has broken. Your principal is at risk; forget about the stinkin' piddly dvd--- IMO, you should DUMP IT, and imagine the current price is the sell price that Junkster suggested that you (should have) set when you purchased it. Stuff happens.
Woulda, coulda, shoulda. It's fun grinding someone's face in the dirt isn't it.
So really, folks waited a half hour after the news to start selling a stock that just dumped on them. Really!?
I agree. Entry and exit plans should be laid out ahead of time for any investment. There was, and still is, plenty of handwriting on the wall with respect toward deterioration in the energy sector. However news events work in both directions. Not everyone can be glued to their electronic devices throughout the day in order to react to every wire snippet. We also have no idea other than digital fog clouds about an investor or their portfolio or their positions in same or any of the reasons why they invest in what they do. For all any of us know those recently bought shares could be add-ons to legacy shares handed down from great, great grandma who lived out her golden years on the capital gains and dividends they produced. Who knows!?
Yeah, I love I told you so's.
Edited to correct some typo's, increase clarity and also to add the following. Conoco' executives made a point of coming out nationally and making repeated statements about how safe the dividend would be. Either they were lying or incredibly incompetent plus too stupid to have a grip on reality. For cripes sake the company RAISED the dividend last year. Since they didn't foresee this being a problem one might postulate that managing a company of this nature and in this environment is not their strong suit.
Junkster said: The moral is be you a trader or investor is always have an exit point. So much thought goes into when to buy yet so little on when to sell. To whom do you think he is addressing this advice?
This was just an observation on money management, nothing more, nothing less. COP was a fave on this board here in the 60s. I don't know how many are still holding tight since then, especially those that touted its purchase based on its fundamentals/dividends. A simple money management strategy based on price would have had you out long before the current fiasco. Unlike so many, I have no pension and only a meager SS of $1019 monthly. Before that I had little to no income outside of the markets. So it is only natural I would be so obsessed with managing losers. I don't have the luxury of other income to ride out the storms in the financial markets.
I was invested in a MLP fund that I sold on a oil bounce last year, but at the time, I was mainly concerned about the effects of rising interest rates on high-yielding MLPs. From what I had heard ad infinitum from analysts, MLPs were the "toll booths" of the oil sector and their earnings had nothing to do with the price of oil.
Buying individual, stocks to be honest, is just a recent "hobby" for me. I set aside a small bucket to play with. The first thing I learned (after mistakes) was to establish with yourself your mind set for the purchase. My mind-set had to be 1 of 2 categories, buy it and hold it, or speculating to hopefully make a profit over a short or long time. Speculating definitely requires establishing the sell point.
If you want to preserve capital as Junkster said, you must set a trailing-stop on the stock. You have to do that right after your purchase. I decided my method would be the 1% rule. Never loose more than 1% of your stock bucket on any single purchase. For example, if you decide you have $10,000 to invest (or play with in my case) in stocks and spend $2000 on a specific stock, set the trailing stop at 5% (($10,000 x 1%)/$2000) = 5%. Allow the stock to trend up (hopefully) and if it drops 5% from it's recent high - auto sell.
Are there other sell rules people use? Like I said, I'm new at this and really have had mixed results. My worst buys were before implementing the trailing stop - for sure. Still hanging on to my first buy, SLB. Darn stock increased ~20% at one point for me, then lost all that and more. But that helped me learn.
@MikeM, have tried similar experiments (with ETFs not individual stocks) none of them really worked for me. Fixed stops in amount or percentage don't work because it depends on the inherent volatility of the asset. A lower volatile asset keeps you in for too long, high volatility takes you out too quickly before it bounces back up. With individual stocks it is worse as they are more often subject to spikes based on news that can trigger these stops. So any mental stop has to be subjected to a judgment when it happens rather than be automatic and that takes time.
I believe this is why @junkster prefers low volatility assets so that you have more time without taking deep losses to make a judgment call rather than an automated decision but the idea of having an exit plan is still valid. He can correct me if I am wrong.
I do follow the Bollinger Bands (which are simply means to keep track of movements in standard deviations, nothing exotic in terms of TA) after having faced the same problem as you in holding on to a gain and seeing it subsequently disappear. If I see the price shoot past the 2 SD band on the upside, I sell. It works more often than not in preserving gains. Selling to limit a loss is much more difficult psychologically.
I believe this is why @junkster prefers low volatility assets so that you have more time without taking deep losses to make a judgment call rather than an automated decision but the idea of having an exit plan is still valid. He can correct me if I am wrong.
I prefer low volatility and trend persistency. That way I can get 100% invested as quickly as possible and capitalize on the compound effect with my account. I can only get that in particular bond fund categories. Also why I stick only with the open end because ETFs are far too volatile for my tastes. I've always been into low volatility and trend persistency. I keyed off certain patterns of such when trading equity funds and even daytrading stock index futures back in the days. Can't trade/invest in individual stocks or baskets of such because of my propensity to ramp up as quickly as possible.
@heezsafe: Blow it out your ass. Some of us have STANDARDS, too. @Mark says it quite well: Conoco' executives made a point of coming out nationally and making repeated statements about how safe the dividend would be. Either they were lying or incredibly incompetent plus too stupid to have a grip on reality. For cripes sake the company RAISED the dividend last year. Since they didn't foresee this being a problem one might postulate that managing a company of this nature and in this environment is not their strong suit.
Comments
http://www.thestreet.com/story/13426949/2/3-oil-companies-likely-to-cut-dividends-as-crude-prices-continue-freefall.html
http://www.bloomberg.com/news/articles/2016-01-19/oil-giants-start-losing-safety-net-as-refining-margins-squeezed This game is a long way from being over, and I don't think the oil majors are immune. It may just take a little while until they are impacted. Already, we see income-- both operating and net--- taking a hit with most of them, and if things like refining margins decline to ziltch.... well, are dvd cuts really off the table? Buy those "juicy" yields (aren't they always) and be the bag holder later. No need to rush in; patience could be richly rewarded here.
To return this to Fund Discussions, which funds are likely to be most affected, which least?
http://investors.morningstar.com/ownership/shareholders-overview.html?t=COP®ion=USA&culture=en_US
@little5bee Did you have a specific MF in mind when you placed your post in the Fund Discussion category?
http://www.marketwatch.com/story/conocophillips-shares-fall-after-missed-profit-lowered-dividend-2016-02-04?siteid=bigcharts&dist=bigcharts
Lets face it, the oil sector is in dire straights. If there are no positive earnings, it's tough for a company to sustain or even give a decent dividend. You can only lay off so many people before cuts have to be made in other areas - like dividends.
It appears this dividend is in line with what it was in 2010.
I see no evidence of insider selling. The news was out on multiple wire services by 10:30 and the selling didn't begin until around 11. But if it gives you comfort to think there were nefarious insiders front-running it then so be it. With regard to THE LYING by the COP Management, was that based on guidance given in December, or from something said more recently? This is a rapidly changing story, and a lot has happened since December. As noted in my longer comment on Jan 19, there were some very bad things developing for the oil majors, things that should have caused you to consider that a big dvd cut was possible. So why express shock now, and create a list of grievances (for what end)?
Mr. Market could not give 2 sh*ts about your silly feeeeelings. Perhaps, creating imaginary insiders and perceiving corporate lying is your way of avoiding having to spend a moment to reflect on what has proven to be your unwise decision to purchase COP where you did. O.K., so what? What matters now is what you do now. If you only have a small stake as you stated above, then why in the world are you holding on for one week, to get the dvd? A lot can happen in a week, the way things are going. What if another oil major also reports terrible revenue and cuts their dvd next week? What do you think will happen to COP? Another drawdown. Maybe another 10% off your stock?
The thesis for your purchase has broken. Your principal is at risk; forget about the stinkin' piddly dvd--- IMO, you should DUMP IT, and imagine the current price is the sell price that Junkster suggested that you (should have) set when you purchased it. Stuff happens.
So really, folks waited a half hour after the news to start selling a stock that just dumped on them. Really!?
I agree. Entry and exit plans should be laid out ahead of time for any investment. There was, and still is, plenty of handwriting on the wall with respect toward deterioration in the energy sector. However news events work in both directions. Not everyone can be glued to their electronic devices throughout the day in order to react to every wire snippet. We also have no idea other than digital fog clouds about an investor or their portfolio or their positions in same or any of the reasons why they invest in what they do. For all any of us know those recently bought shares could be add-ons to legacy shares handed down from great, great grandma who lived out her golden years on the capital gains and dividends they produced. Who knows!?
Yeah, I love I told you so's.
Edited to correct some typo's, increase clarity and also to add the following. Conoco' executives made a point of coming out nationally and making repeated statements about how safe the dividend would be. Either they were lying or incredibly incompetent plus too stupid to have a grip on reality. For cripes sake the company RAISED the dividend last year. Since they didn't foresee this being a problem one might postulate that managing a company of this nature and in this environment is not their strong suit.
The moral is be you a trader or investor is always have an exit point. So much thought goes into when to buy yet so little on when to sell.
To whom do you think he is addressing this advice?
This was just an observation on money management, nothing more, nothing less. COP was a fave on this board here in the 60s. I don't know how many are still holding tight since then, especially those that touted its purchase based on its fundamentals/dividends. A simple money management strategy based on price would have had you out long before the current fiasco. Unlike so many, I have no pension and only a meager SS of $1019 monthly. Before that I had little to no income outside of the markets. So it is only natural I would be so obsessed with managing losers. I don't have the luxury of other income to ride out the storms in the financial markets.
If you want to preserve capital as Junkster said, you must set a trailing-stop on the stock. You have to do that right after your purchase. I decided my method would be the 1% rule. Never loose more than 1% of your stock bucket on any single purchase. For example, if you decide you have $10,000 to invest (or play with in my case) in stocks and spend $2000 on a specific stock, set the trailing stop at 5% (($10,000 x 1%)/$2000) = 5%. Allow the stock to trend up (hopefully) and if it drops 5% from it's recent high - auto sell.
Are there other sell rules people use? Like I said, I'm new at this and really have had mixed results. My worst buys were before implementing the trailing stop - for sure. Still hanging on to my first buy, SLB. Darn stock increased ~20% at one point for me, then lost all that and more. But that helped me learn.
I believe this is why @junkster prefers low volatility assets so that you have more time without taking deep losses to make a judgment call rather than an automated decision but the idea of having an exit plan is still valid. He can correct me if I am wrong.
I do follow the Bollinger Bands (which are simply means to keep track of movements in standard deviations, nothing exotic in terms of TA) after having faced the same problem as you in holding on to a gain and seeing it subsequently disappear. If I see the price shoot past the 2 SD band on the upside, I sell. It works more often than not in preserving gains. Selling to limit a loss is much more difficult psychologically.
I prefer low volatility and trend persistency. That way I can get 100% invested as quickly as possible and capitalize on the compound effect with my account. I can only get that in particular bond fund categories. Also why I stick only with the open end because ETFs are far too volatile for my tastes. I've always been into low volatility and trend persistency. I keyed off certain patterns of such when trading equity funds and even daytrading stock index futures back in the days. Can't trade/invest in individual stocks or baskets of such because of my propensity to ramp up as quickly as possible.
@Mark says it quite well: Conoco' executives made a point of coming out nationally and making repeated statements about how safe the dividend would be. Either they were lying or incredibly incompetent plus too stupid to have a grip on reality. For cripes sake the company RAISED the dividend last year. Since they didn't foresee this being a problem one might postulate that managing a company of this nature and in this environment is not their strong suit.