Mapfumo wrote:77ss wrote:I have no problem avoiding BP. I sold rapidly in the wake of the Macondo disaster, and nearly seven years later the share price is still below my average selling price. I missed out on the dividend cut too. Do you have any reason to suppose that Shell is immune to such an event? The fact that any dividend cut would be a 'big deal for UK pensions' wouldn't stop them if they felt it was necessary.
I hold RDSB, but I keep an eye on it. In my view (which includes capital performance), it hasn't actually done that well in the past 6 years.
6/7 years during which time the oil price has fallen sharply and significantly, removing many more expensive providers, is perhaps not the most appropriate period to judge by? A long-term holder even of BP would still have done very well out of them, albeit not as well as someone who had bought Chevron or Exxon. Like Rio Tinto or BHP, this a cyclical commodity business where increasing prices eventually leads to over-capacity and a downturn. One needs to hold for the long-term (RIO is certainly the best HYP investment I've made in terms of both capital and dividends) or be good at picking the bottom and top of the cycle, which it sounds like you did.
I think also that if your HYP is a multi-decade thing, then it's inevitable that oil & mining companies will have a "disaster" at some point. Shell had a spill in the Gulf of Mexico last year - and obviously much worse things happening in Nigeria. I certainly wouldn't view the Deepwater Horizon event as some kind of "black swan."
Agreed. I wasn't so much 'judging' Shell as passing an observation, based on my personal holding period - Oct 2010 to date. I do sometimes wonder whether the 'never sell Shell' mantra is a bit too facile these days. My feelings abut BP are a bit difficult to pin down and are not limited to the Macondo incident - I just sense an accident-prone company. Dod's 'smell test' perhaps
?As for RIO - I couldn't agree more! Held for 18 years and very lucky.