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Discussion Starter #1
Hey guys and gals,

A newbie here .. found my way over from milliondollarjourney..

Just wondering what everyone was thinking about BP.

It seems like a solid long term buy, but the stock has been hammered over the last few days off its 41 dollar high.

I would have thought with the well being "killed" most of the big problems would be behind them.

Your thoughts are apprecaited!

G
 

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Discussion Starter #3
Thanks!! i took a read of that thread but it hasn't been updated since late july so I thought I'd start a new one since lots has happened since then.

Perhaps I should have bumped that one instead.

G
 

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What is important in valuation of BP is to understand that not long ago the valuation was binary (i.e. either go bust or not). An acid test for this is to look at leaps options out of money and evaluate whether such event is priced in. There is valid reason for BP (at that time) to go bust. In bankruptcy court, liability has to be quantify. Therefore, one can make an argument the company would rather go bankrupt than not. It is obvious (today) that the government made the choice to back BP and avoid a chap 11. Probably a better choice if the government wants steady money coming from BP. Everything being equal, BP at lower-mid 30s is a screaming buy. Note the key words "everything being equal". I hope this helps.
cheers,
 
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