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Diary of a Dumb Investor: The Stockfather, Part BP
I’m pretty chuffed that I bought into BP (BP.L) only days before the oil giant reached a deal over the 2010 Gulf of Mexico oil spill.
A man sits in a dark room, stroking a cat. A lamp enshrouds him in a cold light, giving his features a somewhat dangerous – and yet compelling – glint against the festering shadows. Cue the single violin that kicks off the theme to the Godfather.
But this isn’t Marlon Brando in 1972. It’s me in 2012, relishing the gains I’ve made in my investment in BP (BP.L) shares last week, only days before the oil giant reached a deal with a load of people whose livelihoods it harmed in the 2010 Gulf of Mexico oil spill.
That’s right, time to pay tribute to your new Stockfather!
To recap, I dipped my toes in the stock last week with half of the remaining £2,000 in cash from a fund of £10,000, given to me by my great-uncle to invest. The move was part a play on rising oil prices, part punt on BP sorting out its legal difficulties.
And it looks like finally – FINALLY! – that one of my single-stock purchases is turning out okay.
Admittedly the reader response to my move was lukewarm, at best. ‘I get a sinking feeling when you buy shares I hold,’ pointed out Jayzee Cole, urging me to ‘please sell BP’.
And John Osborne wrote: ‘Who knows what will happen to BP shareprice, but shame you did not buy it when at 400p… At least now you are exposed to a good sector, if the oil price rockets and there are no more real nasties.’
However, while I did buy the shares at quite a high price, 503.3p, they have already risen as high as 512p this morning. And I’m not planning on selling them any time soon.
If anything, the recent performance of other parts of my portfolio shows me the sense of ‘buy and hold’ investing – even as some financial pundits brand this strategy as more moribund than someone who crosses the Stockfather.
Where I stood on Monday: Click to enlarge
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