Anyone buying PG&E stock?

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milosz19
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Anyone buying PG&E stock?

Post by milosz19 » Fri Oct 11, 2019 7:28 am

I suppose the title is self explanatory. I am not seriously considering it, but I just saw that PG&E stock went down by almost 30% on Thursday. Anyone would like to weigh in here?

fabdog
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Re: Anyone buying PG&E stock?

Post by fabdog » Fri Oct 11, 2019 7:34 am

A company in bankruptcy with a highly uncertain future.

Latest chapter in the story is they lost the right to be sole presenter of a reorg plan, opening the filed to Elliot Management to propose a restructuring to exit from bankruptcy.

I have no idea what will end up happening but I'm pretty sure people with more money and expertise are trading in this speculation, so not likely I have any information advantage, and would stay far away.

Just because it went down 30% yesterday doesn't make it a bargain... it may go to zero, it may not

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Re: Anyone buying PG&E stock?

Post by goodenyou » Fri Oct 11, 2019 10:32 am

You’re playing with fire buying PG&E stock. Pun intended.
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StandingRock
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Re: Anyone buying PG&E stock?

Post by StandingRock » Fri Oct 11, 2019 10:37 am

I had a lady from there call me and offer me a job. That was several months ago. Very bizarre. The desperation was palpable.

consurfer
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Re: Anyone buying PG&E stock?

Post by consurfer » Fri Oct 11, 2019 11:24 am

Wouldn't touch it with a 10 foot pole. They need to emerge from bankruptcy by 2021 to be eligible for Federal Wildlife Recovery funds - good chance that equity goes to zero.

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Re: Anyone buying PG&E stock?

Post by z3r0c00l » Fri Oct 11, 2019 11:24 am

The stock is going to zero so I wouldn't buy it at any price.

finfire
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Re: Anyone buying PG&E stock?

Post by finfire » Fri Oct 11, 2019 11:26 am

If you are buying, what do you know that the market doesn't?

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Re: Anyone buying PG&E stock?

Post by KyleAAA » Fri Oct 11, 2019 11:33 am

No. This is a highly specialized niche. Anybody without extensive experience in that niche should stay away.

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baconavocado
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Re: Anyone buying PG&E stock?

Post by baconavocado » Fri Oct 11, 2019 11:44 am

Seems to me that the company has a lot of very valuable assets throughout the state and we'll be relying more and more on electricity rather than hydrocarbon fuels for energy in the future. I don't think the state can function without PG&E. On the other hand, their value is partially dependent on CPUC rulings, and who knows the level of their current and future liabilities.

If I had a choice of investing in PG&E or a California oil refinery, I'd go with PG&E. But since I'm a Boglehead, I only invest in index funds.

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1789
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Re: Anyone buying PG&E stock?

Post by 1789 » Fri Oct 11, 2019 11:48 am

Of course no.
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yb
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Re: Anyone buying PG&E stock?

Post by yb » Fri Oct 11, 2019 11:58 am

This isn't meant to reflect on the OP specifically, but I feel the following article could be applied to most questions about individual stocks on this board.

https://www.whitecoatinvestor.com/indiv ... ocks-dumb/

It should probably be a sticky.

TropikThunder
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Re: Anyone buying PG&E stock?

Post by TropikThunder » Fri Oct 11, 2019 12:02 pm

yb wrote:
Fri Oct 11, 2019 11:58 am
This isn't meant to reflect on the OP specifically, but I feel the following article could be applied to most questions about individual stocks on this board.

https://www.whitecoatinvestor.com/indiv ... ocks-dumb/

It should probably be a sticky.
+1. There are lots of Internet forums dedicated to discussing individual stock investing. I’m always surprised when people think Bogleheads is one of them.

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djpeteski
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Re: Anyone buying PG&E stock?

Post by djpeteski » Fri Oct 11, 2019 12:54 pm

So it is a good time to buy the stock; or, should one buy puts?

Oh right, index funds.

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Re: Anyone buying PG&E stock?

Post by fwellimort » Fri Oct 11, 2019 1:31 pm

This forum is a cult for indexing. Hence "Bogle" "heads".

No one here knows. It could be PG&E is some of the greatest bets of 2019. It could be.. not.
That's the stuff r/wallstreetbets plays with.

If you feel you are the chosen one, go ahead. Otherwise, I can assure you most veterans here gave up single stock picking (or are not as actively trading stocks anymore).

DonIce
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Re: Anyone buying PG&E stock?

Post by DonIce » Fri Oct 11, 2019 1:38 pm

I bought etrade after it dropped ~17% when Schwab announced zero commissions a little bit ago. It's now up 10%. Buying stock after a precipitous fall can be lucrative if you have reason to believe the market over-reacted and that the company is fundamentally sound. Don't know about PG&E though.

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Re: Anyone buying PG&E stock?

Post by DesertDiva » Fri Oct 11, 2019 1:50 pm

Buying individual stocks is not part of my IPS.

https://www.bogleheads.org/wiki/Investm ... _statement

randomguy
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Re: Anyone buying PG&E stock?

Post by randomguy » Fri Oct 11, 2019 2:26 pm

baconavocado wrote:
Fri Oct 11, 2019 11:44 am
Seems to me that the company has a lot of very valuable assets throughout the state and we'll be relying more and more on electricity rather than hydrocarbon fuels for energy in the future. I don't think the state can function without PG&E. On the other hand, their value is partially dependent on CPUC rulings, and who knows the level of their current and future liabilities.

If I had a choice of investing in PG&E or a California oil refinery, I'd go with PG&E. But since I'm a Boglehead, I only invest in index funds.
PG&E probably isn't going away. Shareholder value on PG&E is another question. You could make a good case that the outcomes for PG&E for current shareholders in 5 years are something like 40 dollars or 0 dollars. Through in a guess of a 75% chance of bankruptcy and the current price looks about right. Everyone will have their own guess about the risk of bankruptcy and the stock price when the issue is resolved but there definitely are reasons why the stock is plummeting. We can make a list of times when the bankruptcy didn't happen and the stocks recovered. There is also the list of companies where the stock when to zero.

btenny
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Re: Anyone buying PG&E stock?

Post by btenny » Fri Oct 11, 2019 2:44 pm

Do you realize that PG&E is in bankruptcy now (2019) and was also bankrupt in 2001 (the power deregulation mess) and almost bankrupted in 2010 due to the San Bruno NG explosion? They are just a mess of a company that never seems to do things right. See the links below.

They regularly cause big fires and gas explosions due to bad infrastructure. They cannot figure out how to build or manage power systems and the related business. Please read the wiki below and tell me again why you want to own stock in this company?

https://en.m.wikipedia.org/wiki/Pacific ... ic_Company
https://www.nytimes.com/2019/01/29/busi ... uptcy.html
https://en.wikipedia.org/wiki/San_Bruno ... _explosion
https://www.insurancejournal.com/news/w ... 517078.htm
https://consumerwatchdog.org/newsreleas ... itself-out
http://blogs.edf.org/energyexchange/201 ... eplace-it/


I live in Tahoe part time and travel around the area a lot and see lots of PG&E power lines and installations. The basic thing I see is poor location of power lines running right through oak trees all over the hills in all the wine country and the Sierra foothills. I see abandoned power plants and poor sub-station setups. The electric infrastructure is a mess and I see no plans to fix it. In most places they do not even trim the trees or clear the brush. The utility commission is after them constantly but they just ignore the issues because they have no money so nothing gets done.

Good Luck.

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Re: Anyone buying PG&E stock?

Post by Grt2bOutdoors » Fri Oct 11, 2019 2:54 pm

milosz19 wrote:
Fri Oct 11, 2019 7:28 am
I suppose the title is self explanatory. I am not seriously considering it, but I just saw that PG&E stock went down by almost 30% on Thursday. Anyone would like to weigh in here?
Do you know the reason why it went down 30%? The reason is PG&E had the only restructuring plan originally that would have split the costs between the equity and debt holders, well, that went out the window yesterday when a bankruptcy judge sided with a couple of activist investors (hedge funds) who own alot of the senior debt of PG&E. Under their alternative plan, the stockholders of PG&E are going to pay for nearly all of the costs of the wildfire and upgrades while the debt holders will pay little , if any significant costs. That leaves the bond holders smelling like a rose. So, go ahead, buy it, buying it now will be the equivalent of watching your house burn up in another PG&E caused wildfire. :twisted:
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Random Musings
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Re: Anyone buying PG&E stock?

Post by Random Musings » Fri Oct 11, 2019 7:02 pm

I would not. Regulatory risk is too high. Don't expect that trend to change.

Plus, I don't buy individual stocks.

RM
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Re: Anyone buying PG&E stock?

Post by abuss368 » Fri Oct 11, 2019 7:07 pm

A company in bankruptcy that is in the Wall Street Journal almost every day and not in a good way.

To quote Arnold: "No Chance".
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Re: Anyone buying PG&E stock?

Post by Pinotage » Fri Oct 11, 2019 7:30 pm

Interesting the difference a few months can make. Or not?

viewtopic.php?t=270726

alex_686
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Re: Anyone buying PG&E stock?

Post by alex_686 » Fri Oct 11, 2019 7:34 pm

baconavocado wrote:
Fri Oct 11, 2019 11:44 am
Seems to me that the company has a lot of very valuable assets throughout the state and we'll be relying more and more on electricity rather than hydrocarbon fuels for energy in the future. I don't think the state can function without PG&E.
I remember having a almost identical talk with my coworkers and about investing in Enron as its price was dropping.

KyleAAA has it right. It is going to take some specialized knowledge to figure out the value.

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Re: Anyone buying PG&E stock?

Post by bluquark » Fri Oct 11, 2019 8:46 pm

DonIce wrote:
Fri Oct 11, 2019 1:38 pm
I bought etrade after it dropped ~17% when Schwab announced zero commissions a little bit ago. It's now up 10%. Buying stock after a precipitous fall can be lucrative if you have reason to believe the market over-reacted and that the company is fundamentally sound. Don't know about PG&E though.
Buying a stock on negative news can also be punishing if the market underreacted, and those participants who took longer to analyze the news concluded that it's even worse than initially assumed. That's why we have the phrase "catching a falling knife".

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Re: Anyone buying PG&E stock?

Post by arcticpineapplecorp. » Fri Oct 11, 2019 8:50 pm

If you know they're going through bankruptcy are you not familiar with another company that went through bankruptcy (but survived), yet the old shareholders were wiped out (and the "new" company issued new stock): GM (2009)

https://www.usatoday.com/story/money/co ... n/2097515/
And that's been the case for investors of the old General Motors, which filed for Chapter 11 reorganization on June 8, 2009.

Common stock holders in the old General Motors were essentially wiped out, watching their shares morph into shares of Motors Liquidation. The common stock originally traded on the Pink Sheets but was later canceled.

Meanwhile, shares of the new GM, which went public in 2010 have held up reasonably well. Shares of GM were initially priced at $33 a share, so those early investors are down, since the stock is trading for $29.10. But GM stock is up 50% from July 2012.

But, unfortunately for shareholders in the old GM, the relative safety of the new GM's stock is of no value to them. Shares of the old GM are canceled. Investors must learn from this situation and remember to never hold shares of an individual company's stock...
(quote in red taken slightly out of context from the original article...but I think it makes much more sense in the edited version above)
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Re: Anyone buying PG&E stock?

Post by Sandtrap » Fri Oct 11, 2019 9:20 pm

A senior supervisor at P G & E told me that it was a good time to buy when bankruptcy was underway and shares dropped to $6.24. He said he bought about 100k worth of it. Shortly thereafter it rose to $24/share or so. He told me, "see, look how much I'm making."
He's also at Edward Jones and says they make a lot of money for him.
Now, P G & E is back down again.

As a "boglehead", there's nothing to say.

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Re: Anyone buying PG&E stock?

Post by 7eight9 » Fri Oct 11, 2019 9:31 pm

arcticpineapplecorp. wrote:
Fri Oct 11, 2019 8:50 pm
If you know they're going through bankruptcy are you not familiar with another company that went through bankruptcy (but survived), yet the old shareholders were wiped out (and the "new" company issued new stock): GM (2009)

https://www.usatoday.com/story/money/co ... n/2097515/
And that's been the case for investors of the old General Motors, which filed for Chapter 11 reorganization on June 8, 2009.

Common stock holders in the old General Motors were essentially wiped out, watching their shares morph into shares of Motors Liquidation. The common stock originally traded on the Pink Sheets but was later canceled.

Meanwhile, shares of the new GM, which went public in 2010 have held up reasonably well. Shares of GM were initially priced at $33 a share, so those early investors are down, since the stock is trading for $29.10. But GM stock is up 50% from July 2012.

But, unfortunately for shareholders in the old GM, the relative safety of the new GM's stock is of no value to them. Shares of the old GM are canceled. Investors must learn from this situation and remember to never hold shares of an individual company's stock...
(quote in red taken slightly out of context from the original article...but I think it makes much more sense in the edited version above)
PG&E Corp. shareholders are likely to make it through bankruptcy without getting wiped out if the company still wants to be able to raise money in the future.
The company didn’t liquidate its shareholders, and it repaid its creditors in full, when its Pacific Gas & Electric utility unit filed for bankruptcy in April 2001, according to Kit Konolige, a Bloomberg Intelligence analyst. That’s unlike a typical bankruptcy in which equity holders see their stake vanish, he said.

PG&E Shareholders May Survive Bankruptcy If Past Is Prologue --- https://news.bloomberglaw.com/bankruptc ... prologue-1

The Honorable Dennis Montali oversaw PG&E's 2001 bankrupcy which turned out pretty well for the shareholders.
PG&E Bankruptcy Is Deja Vu for Judge Who Handled 2001 Filing --- https://www.bloomberg.com/news/articles ... 001-filing
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Re: Anyone buying PG&E stock?

Post by Turbo29 » Fri Oct 11, 2019 9:49 pm

baconavocado wrote:
Fri Oct 11, 2019 11:44 am
Seems to me that the company has a lot of very valuable assets throughout the state and we'll be relying more and more on electricity rather than hydrocarbon fuels for energy in the future. I don't think the state can function without PG&E. On the other hand, their value is partially dependent on CPUC rulings, and who knows the level of their current and future liabilities.

If I had a choice of investing in PG&E or a California oil refinery, I'd go with PG&E. But since I'm a Boglehead, I only invest in index funds.
Many of those assets have suffered from years of deferred maintenance. They also have to deal with decommissioning the Diablo Canyon nuclear plant in 4-5 years.

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Re: Anyone buying PG&E stock?

Post by Geno » Fri Oct 11, 2019 10:07 pm

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arcticpineapplecorp.
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Re: Anyone buying PG&E stock?

Post by arcticpineapplecorp. » Sat Oct 12, 2019 9:03 am

7eight9 wrote:
Fri Oct 11, 2019 9:31 pm
arcticpineapplecorp. wrote:
Fri Oct 11, 2019 8:50 pm
If you know they're going through bankruptcy are you not familiar with another company that went through bankruptcy (but survived), yet the old shareholders were wiped out (and the "new" company issued new stock): GM (2009)

https://www.usatoday.com/story/money/co ... n/2097515/
And that's been the case for investors of the old General Motors, which filed for Chapter 11 reorganization on June 8, 2009.

Common stock holders in the old General Motors were essentially wiped out, watching their shares morph into shares of Motors Liquidation. The common stock originally traded on the Pink Sheets but was later canceled.

Meanwhile, shares of the new GM, which went public in 2010 have held up reasonably well. Shares of GM were initially priced at $33 a share, so those early investors are down, since the stock is trading for $29.10. But GM stock is up 50% from July 2012.

But, unfortunately for shareholders in the old GM, the relative safety of the new GM's stock is of no value to them. Shares of the old GM are canceled. Investors must learn from this situation and remember to never hold shares of an individual company's stock...
(quote in red taken slightly out of context from the original article...but I think it makes much more sense in the edited version above)
PG&E Corp. shareholders are likely to make it through bankruptcy without getting wiped out if the company still wants to be able to raise money in the future.
The company didn’t liquidate its shareholders, and it repaid its creditors in full, when its Pacific Gas & Electric utility unit filed for bankruptcy in April 2001, according to Kit Konolige, a Bloomberg Intelligence analyst. That’s unlike a typical bankruptcy in which equity holders see their stake vanish, he said.

PG&E Shareholders May Survive Bankruptcy If Past Is Prologue --- https://news.bloomberglaw.com/bankruptc ... prologue-1

The Honorable Dennis Montali oversaw PG&E's 2001 bankrupcy which turned out pretty well for the shareholders.
PG&E Bankruptcy Is Deja Vu for Judge Who Handled 2001 Filing --- https://www.bloomberg.com/news/articles ... 001-filing
yes, i get that. but my main point is, you never know.

when a company goes out of business, you assume you'll lose 100% of your investment. That's fair. You lost, but everybody did...including the company which would be no more.

But it seems very unfair to me that a company DOESN'T go out of business, yet you still lose 100% of your investment.

That's not how it's supposed to work. But it can. And it has (GM is case in point). Therefore, why take the risk of owning any individual stock when you can be completely wiped out even though the company isn't???

Heads you win, tails I lose.

I choose not to play a game that provides an unfair advantage to me and encourage gamblers who choose to purchase individual stocks to understand the risks (all the risks, like you lose everything despite the company staying in business) before buying individual stocks.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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Re: Anyone buying PG&E stock?

Post by JoMoney » Sat Oct 12, 2019 9:26 am

... Investors must learn from this situation and remember to never hold shares of an individual company's stock...
'The dose makes the poison.' It's not owning individual stocks that was the problem, every 'Total Stock Market Index' investor owned GM stock. It's making concentrated bets on individual stocks that creates the extremely risky situation.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Anyone buying PG&E stock?

Post by rascott » Sat Oct 12, 2019 9:36 am

arcticpineapplecorp. wrote:
Sat Oct 12, 2019 9:03 am
7eight9 wrote:
Fri Oct 11, 2019 9:31 pm
arcticpineapplecorp. wrote:
Fri Oct 11, 2019 8:50 pm
If you know they're going through bankruptcy are you not familiar with another company that went through bankruptcy (but survived), yet the old shareholders were wiped out (and the "new" company issued new stock): GM (2009)

https://www.usatoday.com/story/money/co ... n/2097515/
And that's been the case for investors of the old General Motors, which filed for Chapter 11 reorganization on June 8, 2009.

Common stock holders in the old General Motors were essentially wiped out, watching their shares morph into shares of Motors Liquidation. The common stock originally traded on the Pink Sheets but was later canceled.

Meanwhile, shares of the new GM, which went public in 2010 have held up reasonably well. Shares of GM were initially priced at $33 a share, so those early investors are down, since the stock is trading for $29.10. But GM stock is up 50% from July 2012.

But, unfortunately for shareholders in the old GM, the relative safety of the new GM's stock is of no value to them. Shares of the old GM are canceled. Investors must learn from this situation and remember to never hold shares of an individual company's stock...
(quote in red taken slightly out of context from the original article...but I think it makes much more sense in the edited version above)
PG&E Corp. shareholders are likely to make it through bankruptcy without getting wiped out if the company still wants to be able to raise money in the future.
The company didn’t liquidate its shareholders, and it repaid its creditors in full, when its Pacific Gas & Electric utility unit filed for bankruptcy in April 2001, according to Kit Konolige, a Bloomberg Intelligence analyst. That’s unlike a typical bankruptcy in which equity holders see their stake vanish, he said.

PG&E Shareholders May Survive Bankruptcy If Past Is Prologue --- https://news.bloomberglaw.com/bankruptc ... prologue-1

The Honorable Dennis Montali oversaw PG&E's 2001 bankrupcy which turned out pretty well for the shareholders.
PG&E Bankruptcy Is Deja Vu for Judge Who Handled 2001 Filing --- https://www.bloomberg.com/news/articles ... 001-filing
yes, i get that. but my main point is, you never know.

when a company goes out of business, you assume you'll lose 100% of your investment. That's fair. You lost, but everybody did...including the company which would be no more.

But it seems very unfair to me that a company DOESN'T go out of business, yet you still lose 100% of your investment.

That's not how it's supposed to work. But it can. And it has (GM is case in point). Therefore, why take the risk of owning any individual stock when you can be completely wiped out even though the company isn't???

Heads you win, tails I lose.

I choose not to play a game that provides an unfair advantage to me and encourage gamblers who choose to purchase individual stocks to understand the risks (all the risks, like you lose everything despite the company staying in business) before buying individual stocks.

That's why they are called risky assets.

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arcticpineapplecorp.
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Re: Anyone buying PG&E stock?

Post by arcticpineapplecorp. » Sat Oct 12, 2019 10:13 am

rascott wrote:
Sat Oct 12, 2019 9:36 am
arcticpineapplecorp. wrote:
Sat Oct 12, 2019 9:03 am
7eight9 wrote:
Fri Oct 11, 2019 9:31 pm
arcticpineapplecorp. wrote:
Fri Oct 11, 2019 8:50 pm
If you know they're going through bankruptcy are you not familiar with another company that went through bankruptcy (but survived), yet the old shareholders were wiped out (and the "new" company issued new stock): GM (2009)

https://www.usatoday.com/story/money/co ... n/2097515/
And that's been the case for investors of the old General Motors, which filed for Chapter 11 reorganization on June 8, 2009.

Common stock holders in the old General Motors were essentially wiped out, watching their shares morph into shares of Motors Liquidation. The common stock originally traded on the Pink Sheets but was later canceled.

Meanwhile, shares of the new GM, which went public in 2010 have held up reasonably well. Shares of GM were initially priced at $33 a share, so those early investors are down, since the stock is trading for $29.10. But GM stock is up 50% from July 2012.

But, unfortunately for shareholders in the old GM, the relative safety of the new GM's stock is of no value to them. Shares of the old GM are canceled. Investors must learn from this situation and remember to never hold shares of an individual company's stock...
(quote in red taken slightly out of context from the original article...but I think it makes much more sense in the edited version above)
PG&E Corp. shareholders are likely to make it through bankruptcy without getting wiped out if the company still wants to be able to raise money in the future.
The company didn’t liquidate its shareholders, and it repaid its creditors in full, when its Pacific Gas & Electric utility unit filed for bankruptcy in April 2001, according to Kit Konolige, a Bloomberg Intelligence analyst. That’s unlike a typical bankruptcy in which equity holders see their stake vanish, he said.

PG&E Shareholders May Survive Bankruptcy If Past Is Prologue --- https://news.bloomberglaw.com/bankruptc ... prologue-1

The Honorable Dennis Montali oversaw PG&E's 2001 bankrupcy which turned out pretty well for the shareholders.
PG&E Bankruptcy Is Deja Vu for Judge Who Handled 2001 Filing --- https://www.bloomberg.com/news/articles ... 001-filing
yes, i get that. but my main point is, you never know.

when a company goes out of business, you assume you'll lose 100% of your investment. That's fair. You lost, but everybody did...including the company which would be no more.

But it seems very unfair to me that a company DOESN'T go out of business, yet you still lose 100% of your investment.

That's not how it's supposed to work. But it can. And it has (GM is case in point). Therefore, why take the risk of owning any individual stock when you can be completely wiped out even though the company isn't???

Heads you win, tails I lose.

I choose not to play a game that provides an unfair advantage to me and encourage gamblers who choose to purchase individual stocks to understand the risks (all the risks, like you lose everything despite the company staying in business) before buying individual stocks.

That's why they are called risky assets.
no, that's why it's called idiosyncratic risk and has also been known as uncompensated risk.

An investor only takes a risk for which they are likely to receive a return. Take the risk of the market (market risk) and you get the return of the market.

But if you take stock risk (individual stocks) you may not be compensated for taking the additional undiversified/idiosyncratic risk. That's how it's tended to be for the majority of companies since it's been tracked:

https://wpcarey.asu.edu/sites/default/f ... -bills.pdf
https://www.google.com/search?client=fi ... ssembinder
viewtopic.php?p=3660486#p3661024
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Re: Anyone buying PG&E stock?

Post by nisiprius » Sat Oct 12, 2019 10:22 am

No.

I don't know whether or not legendary stock-pickers like Peter Lynch had skill or luck.

What I am quite sure of is I can't get rich by following screaming news headlines everyone has read, and buying the stocks of companies that have already experienced sharp stock price drops due to dramatic catastrophes that have already happened.

The price of PG&E stock is what people are willing to pay based on what they know about the power outages and wildfires. They see tough times ahead for PG&E's business. In 2017, they thought it was a good buy at $70 a share. Now it's priced at $8 a share, because nobody thinks it's a good buy at $70 any more, but someone thinks it is a good buy if they can get it for $8 The people buying at $8 have already thought about PG&E being a fundamentally good or bad company. They have already played their rock-paper-scissors market-psychology mind games with everyone else in the market.

The mere fact that a stock's price has dropped doesn't automatically make it a good buy. Or a bad buy.

In order to think about doing this, you have to have looked into this in detail in dollars and cents and you can't just say "gee, it dropped 30% on Thursday, that's a lot." You have to have some kind of numbers in a spreadsheet based on a ton of financial data that says "I say it shouldn't be down any more than 23.8%." Or you have to be such a brilliant financial thinker that you can make an accurate judgement that 23.8% is about the right number and that 30% is too much.

Say a neighbor has a used car to sell, with a sign on it saying $4,000, and you're interested in buying it. But before you buy it, he has a fender-bender nd puts a big dent in it, and he changes the sign to $3,000. Are you suddenly more interested in buying it because the price dropped? Do you feel sure that he automatically was too pessimistic, and that because the price dropped, it must really be worth more than he thinks it is? Do you say "Because the price has dropped to $3,000, then it is almost certain I can sell it for $3,500?" No, it depends on the dent, what you know about the dent, whether you know more about the cost of fixing dents and selling cars than he does, and so on. All you can say qualitatively is that yeah, the price is lower than it was, and, yeah, it's not as good a car as it was.

Certainly, in novels people are always making fortunes based on broad-brush judgements from easy observations. "Ah, yes, I see a bright future for micro-computers, even in the home. I can see housewives using a micro-computer on their kitchen counter to plan tasty, nutritious meals, while dad in the den is using a micro-computer to balance the checkbook. So, yes, Mr. Jobs, I shall invest much money in your company, because it is certain to grow with the growth of this dynamic and vibrant industry." But in real life it's just as likely that you buy stock in Commodore International.
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TaxingAccount
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Re: Anyone buying PG&E stock?

Post by TaxingAccount » Sat Oct 12, 2019 1:21 pm

.....
Last edited by TaxingAccount on Tue Nov 05, 2019 1:37 pm, edited 1 time in total.

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mrspock
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Re: Anyone buying PG&E stock?

Post by mrspock » Sat Oct 12, 2019 3:32 pm

milosz19 wrote:
Fri Oct 11, 2019 7:28 am
I suppose the title is self explanatory. I am not seriously considering it, but I just saw that PG&E stock went down by almost 30% on Thursday. Anyone would like to weigh in here?
Before buying this or any other single stock, I’d challenge you to find the confidence to buy any of them in a quantity that would materially impact your retirement or FI goals.

Many on here could buy 100k of PCG, have it triple, now pay the tax man (a solid 20-30% in LTCG) and it would barely move their portfolio. So why bother?

On the other hand those who have maybe 400k saved, betting wrong with 100k could seriously damage their long term savings goals (100k at 30 is worth MUCH more than 100k at 50 due to compounding).

On an after tax basis, it’s pointless for both camps. It either doesn’t move the needle, or is far to risky.
Last edited by mrspock on Sat Oct 12, 2019 4:14 pm, edited 1 time in total.

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Re: Anyone buying PG&E stock?

Post by Broken Man 1999 » Sat Oct 12, 2019 3:58 pm

mrspock wrote:
Sat Oct 12, 2019 3:32 pm
milosz19 wrote:
Fri Oct 11, 2019 7:28 am
I suppose the title is self explanatory. I am not seriously considering it, but I just saw that PG&E stock went down by almost 30% on Thursday. Anyone would like to weigh in here?
Before buying this or any other single stock, I’d challenge you to find the confidence to buy any of them in a quality that would materially impact your retirement or FI goals.

Many on here could buy 100k of PCG, have it triple, now pay the tax man (a solid 20-30% in LTCG) and it would barely move their portfolio. So why bother?

On the other hand those who have maybe 400k saved, betting wrong with 100k could seriously damage their long term savings goals (100k at 30 is worth MUCH more than 100k at 50 due to compounding).

On an after tax basis, it’s pointless for both camps. It either doesn’t move the needle, or is far to risky.
I have to agree with mrspock. Even with a solid company I wouldn't put more than 5% in individual stocks. Wouldn't be prudent.

BTW, I saw this somewhere on the 'net: What did Californians use before they they started using candles? Answer: Electricity!

What an absolute mess!

Broken Man 1999
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Re: Anyone buying PG&E stock?

Post by abuss368 » Sat Oct 12, 2019 6:31 pm

Sandtrap wrote:
Fri Oct 11, 2019 9:20 pm
A senior supervisor at P G & E told me that it was a good time to buy when bankruptcy was underway and shares dropped to $6.24. He said he bought about 100k worth of it. Shortly thereafter it rose to $24/share or so. He told me, "see, look how much I'm making."
He's also at Edward Jones and says they make a lot of money for him.
Now, P G & E is back down again.

As a "boglehead", there's nothing to say.

j :happy
It is incredible that investors take these risks and pay such high fees in the process.
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Re: Anyone buying PG&E stock?

Post by abuss368 » Sat Oct 12, 2019 6:32 pm

Broken Man 1999 wrote:
Sat Oct 12, 2019 3:58 pm
mrspock wrote:
Sat Oct 12, 2019 3:32 pm
milosz19 wrote:
Fri Oct 11, 2019 7:28 am
I suppose the title is self explanatory. I am not seriously considering it, but I just saw that PG&E stock went down by almost 30% on Thursday. Anyone would like to weigh in here?
Before buying this or any other single stock, I’d challenge you to find the confidence to buy any of them in a quality that would materially impact your retirement or FI goals.

Many on here could buy 100k of PCG, have it triple, now pay the tax man (a solid 20-30% in LTCG) and it would barely move their portfolio. So why bother?

On the other hand those who have maybe 400k saved, betting wrong with 100k could seriously damage their long term savings goals (100k at 30 is worth MUCH more than 100k at 50 due to compounding).

On an after tax basis, it’s pointless for both camps. It either doesn’t move the needle, or is far to risky.
I have to agree with mrspock. Even with a solid company I wouldn't put more than 5% in individual stocks. Wouldn't be prudent.

BTW, I saw this somewhere on the 'net: What did Californians use before they they started using candles? Answer: Electricity!

What an absolute mess!

Broken Man 1999
Mr. Bogle always recommended that the “funny money” account not be greater than 5% of a portfolio.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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F150HD
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Re: Anyone buying PG&E stock?

Post by F150HD » Sat Oct 12, 2019 7:31 pm

there was a thread on this exact topic a year ago after the big fire someone was going to shift the majority of their 401 into PG& E stock has anyone read that thread I cannot locate it

Tal-
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Re: Anyone buying PG&E stock?

Post by Tal- » Sat Oct 12, 2019 7:52 pm

I have only bought one individual stock in my life, and that was Movie Pass (HMNY). And, I kinda love the idea of buying PGE stock. This leads to two important take aways:

1: I learned my lesson from HMNY, and will pass on individual stocks in the future.
2: If I like PGE stock, you should certainly NOT buy it.

It's a gamble - not an investment.
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JonnyDVM
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Re: Anyone buying PG&E stock?

Post by JonnyDVM » Sat Oct 12, 2019 8:53 pm

This question keeps coming up. No. Hard pass.
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Re: Anyone buying PG&E stock?

Post by Tyler Aspect » Sat Oct 12, 2019 9:10 pm

The lifetime of an individual company is shorter than our investment horizon. Holding individual stocks too long could have their values dropping to $0.
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Re: Anyone buying PG&E stock?

Post by tony_roach » Fri Oct 25, 2019 3:03 pm

another big drop after the latest fire...who would even think this is a good idea.

aristotelian
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Re: Anyone buying PG&E stock?

Post by aristotelian » Fri Oct 25, 2019 3:10 pm

Too big to fail. It's gotta be, right?

Teague
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Re: Anyone buying PG&E stock?

Post by Teague » Fri Oct 25, 2019 8:16 pm

Saw a report from one of the major investment firms today (maybe Chase, Fidelity, can't remember) where their analyst who covers such things estimated a 75% chance the stock would go to zero.

More PGE power shutoffs scheduled for the weekend, possibly 2.5 million will be without power for up to 48 hours.

On the positive side I heard that, in the name of safety, PGE will now be mailing their customers 10 electrons at a time.
Semper Augustus

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snackdog
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Re: Anyone buying PG&E stock?

Post by snackdog » Fri Oct 25, 2019 9:10 pm

Dramatic News which has little to do with the cash flow of a company can make for a great buy. However, the lawsuits and bankruptcy are real in this case. It is possible the images of the wildfires depress the stock temporarily. Buy with caution.

ARoseByAnyOtherName
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Re: Anyone buying PG&E stock?

Post by ARoseByAnyOtherName » Fri Oct 25, 2019 9:27 pm

Maybe you should short it instead of buying.

alex_686
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Re: Anyone buying PG&E stock?

Post by alex_686 » Fri Oct 25, 2019 10:22 pm

ARoseByAnyOtherName wrote:
Fri Oct 25, 2019 9:27 pm
Maybe you should short it instead of buying.
It is under $5. Margin starts getting prohibitively hard once a stock drops below $8. This is only half in jest.

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Re: Anyone buying PG&E stock?

Post by AlohaJoe » Sat Oct 26, 2019 2:03 am

aristotelian wrote:
Fri Oct 25, 2019 3:10 pm
Too big to fail. It's gotta be, right?
Why? Was GM too big to fail? How about Fannie & Freddie?

Just because the company gets propped up is no guarantee that shareholders don't get wiped out.

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