Typically, when an event occurs that causes a stock’s price to drop
significantly we would look at that stock as a potential investment. This is
not and will not be the case with BP.
Our first criteria for investment, is that the business be one of significant
quality. BP cannot be considered quality. As David Leonhardt pointed out in
his May 31 New York Times article entitled “Spillonomics: Underestimating
Risk”. BP has been a company seeking profits to the exclusion of other
equally serious responsibilities.
Leonhardt wrote, “Years before the Deepwater Horizon rig blew, BP was
developing a reputation as an oil company that took safety risks to save
money. An explosion at a Texas refinery killed 15 workers in 2005, and
federal regulators and a panel led by James A. Baker III, the former
secretary of state, said that cost cutting was partly to blame. The next
I am not sure the origination of this quote, but it certainly is timely:
"Hard work: All hard work brings profit; but mere talk leads only to poverty.
Earnings: Never depend on a single source of income.
Spending: If you buy things you don’t need, you’ll soon sell things you
Savings: Don’t save what is left after spending; Spend what is left after
Borrowings: The borrower becomes the lender’s slave.
Accounting: It’s no use carrying an umbrella, if your shoes are leaking.
Auditing: Beware of little expenses; a small leak can sink a large ship.
Risk-taking: Never test the dept... (more)
FINRA (Financial Industry Regulatory Authority) has just published an article
on Avoiding Investment Scams which is available below:
FINRA Avoiding Investment Scams
This article is six pages long, and depending upon your perspective, either
teaches you how to run an investment scam or how to recognize one. It
however, does not teach you how to avoid one in the first place.
Here is a reprisal of the earlier piece we did on how to AVOID an investment
This is what you have with The Barfield Group and what you can tell your
friends: It is very simple, but oh so effective:
1) Have ... (more)
The real budget issue at present (and it’s only going to get worse) is the
structure and cost of entitlement programs. Bush’s defense and security
programs in the aftermath of 9/11, as well as the TARP and Financial
Institution bailouts, pail drastically in comparison to the unchecked
increase in Social Security and Medicare that has already occurred and
continues to take place.
At the present rates of tax revenue and payment for entitlements, tax rates
will have to double
over the next 60 years.
Yet the problem need not advance to this degree. IT CAN BE SOLVED. Paul
Ryan’s “Road... (more)
Finally the other shoe drops. On the front page of Monday’s USA Today,
research done by Harvard University’s Joint Center for Housing Studies
discovered “Homes that cost less hit the hardest.”
The article details the fact the lowest price homes in markets all across the
US have experienced price drops greater than homes which cost more. This is
no surprise and it is the natural consequence of artificial incentives
instilled into the housing market by the Community Reinvestment Act
originally signed by Jimmy Carter, and subsequently updated in the Gramm
Leach Bliley Act signed by ... (more)