Whenever an event happens there are a multiple methods to look at what has happened. On the news the human side or the human story is the first story and it should be for news involves people. After the people side is the corporate effect, did a company benefit or not benefit from the news. After becomes the analysis side from engineers, disaster recovery people and all the other people involved. The book A Hole in the Bottom of the Sea by Joel Achenbach, Simon & Schuster, NY, 2011 is the engineers side of the story of the BP Oil Gusher in the Gulf Coast. There were many things to learn, some of the lessons were very expensive, but lessons to be learned.  Some of the lessons to be learned are Take care of the little things. Pay attention to the stuff that does not quite make sense. Do not ignore those anomalies and hope they will go away of their own volition. Respect the rules. Follow proper procedures. Do not ignore low probability, high consequence scenarios. Hope for the best, but plan for the worst.

The BP Oil Gusher story is interesting of many levels including why it is almost impossible to keep things secret anymore. Many of us tend to believe government because they generally have our best interests at hand, although similar to any organization downplaying what is going on is usually done, which means we are healthy sceptics. In the case of BP, there were people with access to NASA images and monitor oil spills. For the rest of us, that is good because as much as owning oil stocks are good, in the back of your mind we know no company is perfect. What we expect is every year they do better at their jobs. People outside of the oil industry help monitor the oil industry is a good thing. The story is interesting because as much as undersea drilling is a technical marvel, when something goes wrong, no one really knew how to fix it. The systems were designed, the policies were designed to have fail safe and backup fail safe but they did not work. The proposals which were offered ranged from outrageous to redrill, all of which took time. And the clock is ticking and no one really knows, but everyday someone else was thinking about another method the environment we live in is connected and the oil needed to be stopped sooner than later.

Linking to dividend paying stocks, BP earned and has earned billions of dollars for its shareholders, at the time of the oil spill, the stock price (rightfully) went down and the cost of the clean up kept rising. The pressures on everyone in the system were great and the well was eventually drilled to stop the oil from leaking into the Gulf. It has taken BP a number of years to return to  a stabilized dividend paying company, including selling of some of its assets. When big events happen, as a shareholder, you loyalty can remain to the company but lower your stock holdings for a period of months. You can buy back at lower prices. Big negative events means a time of exit, sooner than later, but the underlying reason for the company to exist means you can repurchase in the months to come and then continue to earn dividends.

There are more questions than answers, till then next time – to raising questions