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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: drsvelte who wrote (3974)11/30/1997 11:25:00 AM
From: David Spruiell  Read Replies (2) of 95453
 
I try to realize that there is a seperation between the business and the market. A great business may have a stock price with a PE of 6 due to end of the year profit taking and brokerages balancing their portfolios. After all, the bonuses are to be paid in cash.
The market is always right. The market is telling me that there have been more sellers than buyers over the past two weeks.
Reading the past post gives me the impression that crude will drop in price over the next 6 months. That is why the big oil firms are contracting for drillers on a day rate. It is less risk than owning a fleet of rigs. If oil drilling becomes to expensive, they don't renew the contracts. Price of oil goes up, they contract for drilling on a short term basis.
The price of oil is related to the price of exploration and drilling. OPEC has the new technological advances also. So in theory OPEC has the technology the drill at a lower cost also. So even lower oil prices from OPEC?
The end result, if the drillers stock prices go up , there will be a flurry of selling and drive the price down. So it will not go up. Just a painful slow bleeding till the analyst announce down grades. Then they will fall like the cigar stocks.
I really don't know what will happen Monday AM.
Best luck to all, Long MDCO, Looking for the exit. Maybe reenter at a lower price.
David
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