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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (19763)10/5/2004 9:39:33 PM
From: E_K_S  Read Replies (1) of 78627
 
Hi Paul - The home builder cycle may be long in the tooth but it is a sector, if timed right in the cycle, where you could make tons of money. I think that ths shipping/tanker sector follows a similar cycle to the home building sector but rather than a function of interest rates it is following the price of oil.

FRO and SFL continue to hit new highs as oil closes above $50.00.

I hear that the daily tanker rates are at all time highs and during the next six months is peak season too.

Do you think this time it is a long term trend higher (like what the housing stocks are seeing?) or is it just a short term bubble? Based on pure value analysis both the home builders and the shipping/tanker companies have very low PE's and resonable book value based on the underlining assets. I am tempted to buy more SFL or even diversify into other tanker/shipping companies but like the home builders we may have already seen the run.

Any opinion?

EKS

P.S. I have my eye on MRK but am looking for a lower low on lower volume (some price below $31). This may occur in the next six months on continued negative news (ie more litigation, bad pipe line, negative WSJ articles etc.). It's setting up for a perfect value play. You just have to wait for the OBV to reach it's low and then back up the truck.
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