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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (75773)2/12/2000 3:51:00 PM
From: double-plus-good  Read Replies (3) of 132070
 
Michael,

I follow a very value oriented approach and agree with your assessment of when to sell. <You buy a stock that is cheap and sell it when it is fully or slightly overpriced. You also sell when the fundamentals turn out not to be what you...>

I loaded the boat on energy issues at the beginning of last year and did fabulously until late summer. I bought back into producers that had rewarded me well and that rerpresented to me compelling valuations. Metrics I used were cash flow and reserve value and the continuing bull case for the commodities.

Flushed some of the losers out for tax loss but continued to build positions in a couple i especially liked. One problem may be that they are small/mid-caps, but that is obviously not the only problem as in some instances they are near or below prices last seen at 1.65 Nat. gas and 12 oil. Is the market discounting some aspect of these shares that I am not aware of? For example, is the attitude toward these issues reflect a market expectation for recession which would kill energy demand and pricing? Already trading at around 2x cash flow in some instances and below asset value, why are they continuing to get trashed? Have the fundamentals changed IYO? Ranger Oil, Comstock Resources and Ocean are a few of the specific companies.

I remember your recent discussion of selling Aug 35's on BR. Is the nature of a "synthetic long" to recycle some of the sale proceeds into buying calls as well? I thougt a bit about that trade but am fairly heavy already in the sector and am wondering about the very grim treatment being handed out to these issues.

++good
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