Truth ?
re:
["So,guess if I have a point it is that longer term, the NG equities look undervalued and as soon as 1st quarter
earnings for techs hit, or this rally hits a point where traders take profits in techs and dow stocks, they will probably come back for a look when 1st Q NG earnings come out and when everyone realizes there never was much of a shoulder. It may take a few more weeks, but something to think about. Think we will see another
rally on the NG equities in the next few weeks'}
Truth; what RALLY in tech stocks ? The NAZ has fallen 1600 points and only bounced less than 100 points off the bottom in the last 6 mos ? There has been no rally in tech.
Also; we allready have had our topping rally in Nat Gas stocks - it peaked at the end of December into the "Too Perfect California-Crisis Storm" (THAT was the TRUE contrarian play - selling & exiting the "too" perfect storm and expections) and we recently had a little pop off of the Barrett takeout news - which was another profit taking exit opp.
All one needs to do to know where we are in the E&P cycle is to look at the perennial Street Fav's - APA & APC.
They are so far off their highs & face lower 2002 eps/cfps and commodity price assumptions; that the odds of them setting "significant" new highs - pales when compared to what Tech will offer off its bottom that it is forming here.
In all due respect; I think you've got it completely backwards.
The rotation will be OUT of Oil and back INTO Tech - not the other way around.
Sure; we can bounce off OSX 115 - but, so what.
That's - "Been there & done that" territory and has been so for 12 mos.
There is only ONE reason to stay in OSX, or E&P stocks here on a portfolio weighted basis & imho; that is if you see them going to SIGNIFICANT new highs - ie: $90 APA/APC, or $65 EOG in the E&P's, or OSX 175ish.
I'd be willing to bet most anything & everything that $90 APA/APC, or $65 EOG will not be seen & I think the simultaneous bottoming of Tech into the maturation of the Oilpatch cycle - is going to drain too much momenteum money out of the Oilpatch to make OSX 175ish all too probable either - especially given the grossly underestimated sentiment of those Institutional Managers who got so badly burned on the 97-98 cycle collapse.
... as in all things; we shall just have to wait & see.
The significant difference between the sentiment on these Oil threads; is this thread learned it's lessons from prior cycles well & is NOT repeating the same mistakes made then and is trading this sector as a CYCLICAL sector and not growth stocks. We are trading the Traders (the Street) as much as the fundamentals as the cycle matures & that is a prerequisite for survival AND profit retention.
We are also continually "transitioning" our thinking - as the cycle itself goes thru transitions.
We are moving from weighting the fundamentals - to weighting the technicals.
At the bottom - we entered before the commodity markets reflected the improving fundamentals and now at the top - we will hopefully be exiting before they begin to reflect the declinging fundamentals as well. - THIS IS A KEY CONCEPT PEOPLE ! - the fundamentals do NOT matter at the bottom, or the top. You buy terrible fundies at the bottom & sell great ones at the top... do that & you'll be a true contrarian who not only makes money; but keeps it too !
The most misunderstood point in longterm investing & trading cyclical sectors - is that it's a fools game to try to be the last man standing at THE TOP; as that top is often a very brief & fleeting moment in time and by far the mass majority fail for months & months to realize it for what it was... THE TOP.
Untill proven otherwise; I think we can look back & wave at the end of Aug/first of Sept highs for the OSX and the last week of December for the E&P TOP ...
The closer we get to the top; as well as the further we get away from it; the quicker that playing the trading range, or the buy the dip game, losses it's risk vs reward luster - think about that...
In cyclicals - walking away with a large percentage of profits via having a contrarian EXIT strategy that is as out front of the pack - as your intitial contrarian entry was; is paramount.
Also; remember that you will make just as much money & probably even make it faster; on the downside of the cycle - as on the upside & the reason you will; is the Pom-Pom squad will still be buying dips & thinking "Trading Range" - long, long after the cycle has allready peaked.
Whodathunkit ?
Good Luck |
