Politicalmonkey2010

The Truth Shall Set You Free…It might piss you off first, but it will set you free.

NY to Sue BP Over Poor Performance

Posted by politicalmonkey2010 on June 24, 2010

Free Market at Work, Why the Surprise?

New York state’s pension fund plans to sue BP Plc to recover losses from the drop in the company’s stock price following the worst oil spill in U.S. history, state Comptroller Thomas DiNapoli said on Wednesday….

“BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we’re going to hold it accountable,” said the Democratic comptroller, who will stand for election in November in the race for New York comptroller.

Mmmmm….BUT if this rig had not exploded, and nothing else changed, those dividend checks kept right on rolling in, the stock price remained steady or went up then BP would have still been beloved?  Here’s the cold hard facts, BP is in business.  Business has risks, as an investor you are given a prospectus defining all kinds of risks – in short the job of a good prospectus is to discourage you from investing.   The fact is that rig did explode.  BP has engaged in some extremely poor business practices without a doubt.  Those poor practices have resulted in a decline of the stock value…and rightly so.   The higher the risk, the higher the return.  It isn’t a new concept.  It is called the free market.   The real question each and every one of us, whether we are an institutional investor or a private individual is that you take the time to know what companies you are investing in.  If you are an average investor you probably own shares in a mutual fund, look at the mutual fund closely, exactly what are they investing in?  Call your broker, ask them to explain it, call the mutual fund company.  It is your money.

If we take our money and invest it in socially responsible companies, take an ideological stand with money, we send a message to big business, clean up your act.  The problem is, we all want to get these wonderful rapid returns and oil has been the darling the past 24 months.  If we learned nothing else from the past 18 months from the housing and mortgage industry to the stock market,   didn’t we learn that there is no such thing as a sure bet?   All you need is that one in a million catastrophe.

We had it.

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