Why I Sold BP Prudhoe Bay Royalty Trust (BPT) and Replaced It

Page 1 of 2

What are your main objectives in this crazy investing game? Mine are growth and income. I want to hold stocks for the long term and take advantage of low dividend and long term capital gains tax rates. Yeah, I am pretty bullish on basic materials right now, because my “Spidey Senses” are telling me that the recovery has started in earnest. So, my big thing right now is keeping my eye out for stocks paying great dividends, but the trick is to find ones that hold their value and continue to pay regular dividends. If I find growth stocks on the rise that have high qualified dividends, I am in heaven. Okay, I worry about investing like some kind of serious gambler.

We all want to believe we make dispassionate decisions for buying stocks, but we all know it’s almost impossible to keep greed, fear, panic, superstition and the love of the game out of the process. After all, no one knows the future, and in the end it is a semi-mystical thing we are doing. Sometimes after doing the research, I am left asking “is it the right move to buy this stock?” Whether we care to admit it or not, deciding yes or no comes down to a gut reaction. Some people do this much quicker than others. Most of the time we have already decided we want to buy a stock based on our gut, the research just settles our brain. Often once we have committed to a stock the hardest decision we will have to make (ego), is to recognize that we made a mistake and get out. Again, do we listen to our gut reaction?

Rio Tinto plc (ADR) (NYSE:RIO)

I woke up last Thursday to a very informative Seeking Alpha article about BP Prudhoe Bay Royalty Trust (NYSE:BPT) as a derivative in disguise. I hate to admit it, but fear and panic had me in their grips just then. BPT looks so beautiful on so many levels. It has a yield over 11% and a P/E of just a little over 9. I had just received my $2.31 per share payout from BPT and in addition was up about $4.30 per share on the investment since my mid-December buy. I had been watching BPT forever and finally pulled the trigger, but I didn’t feel good about it. The article had been very detailed and gave a fair market value of $60 to the stock. Investors who got in a decade ago have received enough dividends to pay for the stock, but for us recent buyers the payouts may not reach this level. My gut told me sell, and when I told my wife about the article she said sell (women have this sixth sense). I did and it was gone in about sixty seconds. I thought (with relief), now I get to do research and find another stock to buy for a replacement. I’ll take my time and get a winner.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!