On BP stock, herd instinct is dictating
BP may, fundamentally, be regarded as good value. The company has vast assets. Outside the Gulf of Mexico it is still busy producing oil, contributing to the company's bottom line.
But - and it's a big but – the PR war is still not won. The Chief Executive, Tony Hayward, cannot even go sailing with his son without causing an incident.
BP has become a day trading stock. Who would have thought it?
The law suits are beginning to emerge and with no dividend for at least the next two to three quarters, a number of the big income funds and pension funds are considering how to react, as they need to be able to pay out to their investors.
It is interesting to see how fundamental analysis and research can go out of the window as the herd instinct takes over and reality is ignored. There is a small part of the Florida coastline where oil has reached the beach and tourists are already cancelling. The frenzy builds up and makes people nervous, and that can feed into the stock.
There are other high-profile cases where companies have seen huge downgrades or been wiped out altogether, so deciding whether BP is cheap at the current price, or if there could be a further fall, is not easy.
On the positive side, the Chancellor's budget was well delivered, far-reaching and pointed to a definite plan to reduce the deficit. The plans are highly ambitious and the proposed cuts are supposed to pave the way for a balanced economy by the end of this Parliament. Coalition nerves are jangling and the Liberals are finding that there is a price to pay for sitting on the front bench.
It will be some time before we know whether the squeeze will strike the right balance between reducing the debt levels and not choking off growth, but in the meantime the City has given a cautious welcome to the proposal and the currency is moving, which is particularly welcome if you are planning a visit to the US.
Outside of the UK, the G20 and G8 meetings allowed world leaders to take different paths for cutting deficits. Bankers continue to get a bad press and George Osborne is leading the way in ensuring that the banks pay more to take their share of the responsibility, which may mean that bonuses will be reduced or paid out over a longer period. This will upset few - apart, of course, from bankers.
The summit gave room for countries to move at their own pace, which certainly acknowledges that there is not one solution for all.
Elissa Bayer is an Investment manager at Charles Stanley