I was way wrong and overly optimistic about June resumption. Oh well.
Author: figambler
Dividend Investing: Taking risks vs taking hidden risks
I used to be a risk adverse, conservative investor. To be honest, I wouldn’t even call myself an investor. I only put money in random dividend stocks. The only thing I looked at was yield and familiarity with the company.
Oh, the Keg is a great restaurant chain in Canada, and their yield is 6%, let’s invest in that. Jack Astors gives 9% in dividends, totally worth investing in.
No doubt, it felt good to receive some money every month. It felt like a solid investment putting money into dividend stocks. I got money back every month or quarter, so I felt safe.
I was lucky I bought those companies during the 2008 recession, so not only did I get dividends, these companies actually appreciated. Some even got acquired.
In hindsight, it was a wrong decision to invest in these companies. I neglected
- where these companies were getting money to pay its dividends
- debt, revenue, and profitability
- growth
I was just lucky. End of story.
My friend, FI Fighter and I had a chat years ago at a local cafe in Cupertino, and he mentioned that dividend stocks were comfort stocks. Essentially, you pay yourself with your own money, and the dividends comfort you. Your net gain is zero. The risks are no less than mining stocks and yet the upside is far less than mining stock.
Initially I didn’t pay too much attention to his thoughts, but the more I thought about it, the more I agreed. In a couple months, I started liquidating all my dividend stocks and entered the mining space. I was glad I did or I would have learned about dividend cuts and its impact on share prices the hard way.
Long story short, dividend cuts started happening a year or so later, and share prices went crashing. These, my readers, are the hidden risks in dividend investing. When you hear people say ‘nom nom nom, thanks for the yummy dividends’ on company forums, stay the F away from those companies.
The focus shouldn’t be on the dividends itself; dividends should be the outcome of a well operated company.
I hope I’m better than that now.
Loreto province on its road to recovery. Peru’s Pipeline to resume.
Despite Latin America becoming a hot spot for CV19, at least the Loreto province of Peru is on its road to recover.
Also from the region confirmed this information. “We have a tendency for the curve to flatten, and we can be able to face the pandemic in better conditions at the provincial and district levels. In Maynas the situation has been controlled, we are waiting for a second wave of infections,” said Carlos Calampa , regional director. Loreto’s health
Doesn’t mean Peru is back 100%, but I believe it means the worst is over. It will still take many months to fully recover
Pipeline Resumption
Hence, I’m calling Peru’s Northern pipeline to resume in first week of June. With Brent prices increasing, oil demand slowly recovering, and Loreto province situation improving, it is now in Peru’s interest to resume oil production. To be ahead of the game, oil production needs to start now. Now! Now!
Update: Peru will have the storage to prepare for oil producers to produce again.
The impact of this measure “is to expand its storage capacity for crude oil from 868.65 MB to 1,116 MB and thus avoid suspending the acquisition of crude oil from local producers and the consequent cessation of production of oil lots that would affect the workers from said producers and the canon and surcharge received by the Tumbes and Piura regions; considering that the effects of the declaration of the State of Emergency result in less commercialization of hydrocarbons at the national level
Peru attempting to address CV19 in Iquitos
Iquitos was hit pretty hard. I hope they got a good handle on this. I recall they were short on oxygen tanks, PPE, and doctors. For any activities to restarts in Iquitos, CV19 must be kept under control.
HEADS OF THE MINISTERIAL CABINET
Dispatch of aid and medical equipment for Loreto will be permanent
Commitment and work. That is what the president of the Council of Ministers, Vicente Zeballos, guaranteed in favor of Loreto during his recent visit to this region to carry 12 tons of health aid and to finalize the transfer of 34 doctors in order to join the containment work of the coronavirus.
https://elperuano.pe/noticia-envio-ayuda-y-equipos-medicos-para-loreto-sera-permanente-95995.aspx
Update: And looks like things are improving!!!!
If the health system continues to improve, a pre-hospital center (Straw Hat) would be closing, where people with no symptoms or mild symptoms were cared for.
https://canaln.pe/peru/loreto-diresa-reporta-baja-tendencia-casos-covid-19-n414543
Peru preparing to resume Northern Pipeline in 2 weeks
Yes, they are getting ready after meeting sanitary protocols.
On the other hand, regarding the cessation of operations of the Nor Peruano Pipeline, Guevara announced that they are also “in the process of restarting, to see the personnel that would enter, to verify the state of health”, which may take “about two weeks” . Regarding the possible risks of contagion for the populations surrounding the pipeline, located in the Amazon, the executive said that “people (stationed at the site) go to the stations and do not move,” but that “the personnel have to pass the quarantine (preventive) before going ”to the area.”