Not to rain on your parade, but the Street has always been driven by fear and greed. From the Dutch tulip bust in 1637 to Internet stock frenzy of the late 1990s, promising investments have seen prices run up beyond all reason.
That said, SESI was deservedly beaten down in February when crude sunk to $11 a barrel and Gulf activity slowed to a crawl. If low product prices and red ink don't determine the fair value of a stock, what does? The future looked bleak for SESI seven months ago when I and other stockholders road SESI down to $2. It has brightened considerably, but the fear remains -- rightfully so.
When SESI turns in a coupla good quarters, its price will improve markedly. If SESI management proves it can weather energy price fluctuations and still turn a handsome profit, we will benefit even more. Otherwise, we are just another cyclical stock riding the waves of energy supply and demand -- and the stock price will ultimately stabilize somewhere between boom and bust.
The Internet high flyers are already getting knocked down, but until they're really hurting, there is still a lot of money to be made picking the winners of a burgeoning technology. Jump in and take the risk, or quit whining about the reward. If you don't nibble, when these puppies fall, you can take solace that you were on the sidelines.
Pop history may blame the MMs, analysts, media and tycoons for the market's overexuberance, but the real 'villains' will be the millions of average Joes who simply continued to pour money into stocks or funds that invested in the high flyers.
Sorry for this rant, but I firmly believe in the long-term fairness of the marketplace. |
