Headlines yelled, Big Oil Spill Off Brazil. Complete with satellite images, reports of cover up by a super major oil giant Chevron (CVX), big police investigation, a rig by Transocean (RIG), and message boards abuzz with a spill bigger than the BP (BP) spill in the Gulf of Mexico, the media had a juicy story.
Conspiracy theorists were delighted to see market value of Chevron drop by about $17 billion. Quick trigger fingers at large institutions went along for a ride by rapidly selling Chevron stock in large quantities before even asking a question.
The chart shows the ferocity of the selling.
Investors in Switzerland-based Transocean were creamed again as shares dropped alongside Chevron’s. It appeared a replay of Deepwater Horizon spill. The only difference was that Halliburton (HAL) was not at the party. Halliburton did the cement job at Deepwater Horizon. I stepped up and bought both Chevron and Transocean and sent ‘˜buy’ signals to subscribers to my ZYX buy alert. All six of my screens were flashing ‘˜buy’ for both Chevron and Transocean.
Although I was criticized at the time, my reasoning was simple. Small oil spills are common in deepwater drilling, big spills are rare. Chevron has not been known for aggressive cost-cutting measures like BP was in drilling.
Further differentiating this spill from the Deepwater Horizon in the Gulf of Mexico, satellite images were not showing the Brazilian spill to be anywhere near the size of the slick that came out of the doomed Macondo blowout…Read More at Forbes..