Strictly: Drilling and oil-field services Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: waverider who wrote (18509)	4/8/1998 9:04:00 PM
From: Thean	Read Replies (6) of 95453

Diamond, am glad to see you opened up to see Richard's side of the story. You know where I stand on this. Doug's comment about a sure profit two years out is also too prophetic and arrogant. The bottom dwelling status of the drillers since its decline in November versus other sectors in the overall market I believe is totally unexpected by 90% of the people who own drillers stocks because of the fundamentals. Those who bought PKD a year ago may have lost money. PKD was my first purchase in the driller back in Fall 1996 and I remember I paid 10 3/4 for it. PKD is trading less than 10 3/4 today. Buying and holding may not work out long term. PKD 1 1/2 years ago was like GW 1/2 year ago. Look how tough is it for GW to climb above $5 and all these time it has to work off its high PE just to par with its peers. How about CDG? Maybe only a small profit from a year ago. CDG was on a tear a 1 1/2 year ago. What I'm trying to say is it does matter which company one buys. No matter how much research one does, time changes and the company may not perform as well as some other company in the same group. By holding a laggard long term is a sure way to get hurt because there you watch opportunities after opportunities pass by and other drillers go up and you stock is still stuck! That's why switching once in a while makes sense. That's why trading in and out of the numerous short term cycles makes sense. I have been a driller investor for 1 1/2 year and I have never held onto a single company for more than three months. Yet I have never missed any opportunity. Have I? I rode them all the way up and I missed some of the toughest falls twice (once in Jan 97 and once in Nov 97) because I was out at the right time. It wasn't as much luck as the discipline to regularly take profit. Trading works but it can be stressful especially at the beginning. I bought ESV today. Will ESV become CDG for the next year? No one knows. When ESV pops for a 15% gain I'll start watching how other drillers are doing and will begin setting up sell order. I know ESV's fundamentals look great. I'll also take profit without hesitation after a nice runup. I'll find another opportunity or hold onto cash if everything is overbought by then. Successful investors become wealthy because they sell too soon. If I take 5% profit each month by doing 12 trades, my compounded annual profit gain is 71%. If one were to time the short term cycle correctly (and each month has at least one up-down cycle), a disciplined 5% profit each month is a conservative way to build long term wealth. Think about it - how easy is it to hold onto one stock and it gains over 71%? If one is lucky to hold onto a company that outperforms others, then great. But if one has a portfolio of drillers it is going to be very tough to produce a 71% annual gain. I hope people can see this side of capital preservation approach to investing. <TA> As far as the recent rally and then decline is concerned, I think RIG and NE are the only two drillers that have not closed their trading gaps. That is a clear sign of near term strength. Anyone has any other drillers they know which have not closed their recent trading gaps?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next