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Gold/Mining/Energy : Trico Marine Services (TMAR)

TMAR 22.41

0.0%

Nov 7 9:30 AM EST

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To: Gameboy who wrote (702)	8/24/1998 3:29:00 PM
From: JZGalt	Read Replies (2) of 1153

I fully believe doom & gloom forecasters like this are largely responsible for the huge undervaluations in the oil service sector. Steve, I wish it were that simple. The problem with oil prices is that they are a major source of hard currency for a significant number of the emerging markets. As they feel pressure on their balance of payments, the natural tendency is to prop up the currency by trying to get more hard currency in reserves (read that as pump oil). I believe that is why the OPEC accords in March failed. Now we are caught in another round of world wide currency devaluations. Russia was a joke, but it highlighted the problems in Mexico and Venezuela as well as Brazil. That is the overproduction side of the coin. The other side of the coin (demand) is the world economies are slowing. If you are in europe and the US and trying to export to the emerging markets, you face either currency translation losses or lack of interest because they do not have any money to buy your goods and services. I don't mean to come off as doom and gloom, but there is no reason to believe the loose monetary policies that caused the Asian contagion followed by the tight monetary policies in the US and Europe (EMU) will lead to anything but continued commodity deflation. Oil prices are firming just a bit and there might be some good news if Iraq keeps putting the screws to the UN inspectors, but this price level is still to low to adjust the supply/demand equation and stimulate new committment in offshore drilling. Even when the price passes the magic $15/bbl, there will be a time lag before drilling would restart IMO. Nothing is a straight line to zero, but I said many times in the past few months on this thread that you wait for oil prices to bottom before putting new money to work in this area. I'm in TMAR at a net cost of around $21, but I fully expect I will be able to buy all I want at $10 on the way up. I'm in no hurry.

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