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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: BigBull who wrote (54126)11/5/1999 8:00:00 PM
From: JHalperin  Read Replies (4) of 95453
 
Big Bull and the Board: Bottom Line Topic-

I started to seriously invest in the overall oil and gas sector early this spring based on many companies selling near liquidation values which from a long-term perspective defied logic. I have watched the underlying commodity prices rise dramatically since and while the incredible rally (especially the drillers) this past summer was premature I am confounded by the extent of the sector wide retracement of the last 45 days.

I am challenging my assumptions for staying heavily invested (margin maxed out as of today!):

E&P stock prices do not reflect current and prospective earnings.

Driller and service company stock prices do not reflect prospective earnings.

Commodity prices will remain at least at current prices thru next year primarily because of increasing world demand.

OPEC continues to be adequately successful in not letting the "floodgates open."

CAPEX from the majors will significantly increase by mid 2000.

I think the main reason for this retracement is rotation back into the techs as evidenced by NASDAQ's recent rally. How can this sector be dumped at this point in time in spite of such seemingly overwhelming value and prospects?

I am a long-term value investor and I get my info from many sources.
I certainly don't have the experience in this sector as many of you do and sincerely ask for a reality check on my assumptions.

BTW - this is a great forum!

Thanx,

Joel Halperin
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