Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cobalt International Energy, (NYSE:CIE) dropped as much as 12% today after providing an operational update.

So what: Aegean No. 1 exploratory well in the Gulf of Mexico has reached objective depth of 34,701 feet, but did not encounter commercial hydrocarbons in targeted zones. The well will be plugged and abandoned. 

Now what: This is a big blow for Cobalt and, with a 60% interest in the Aegean property, this will be a big financial loss, as well. But that's the risk for investors who buy into exploration companies like this. It's also why I'll be staying away from Cobalt International -- because it's just too speculative for me as an investor.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.