Strictly: Drilling and oil-field services Message Board

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

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To: John Carpenter who wrote (28305)	8/25/1998 4:27:00 PM
From: John Carpenter	Read Replies (3) of 95453

At what point do oil service equities reflect any potential bad news? Stocks trading at or near book value. Forward PEs of 5 or 6 on reduced estimates. None of these companies are expected to lose money next year-even the lowest of estimates call for profitable years. Yet, we have internet companies that will incur losses or miniscule profits for years at best trading at thousands times earnings. Some may argue that the internet offers greater growth. That's by no means certain. Most commerce will still be done off the net. YHOO, AMZN, AOL are not so large that they can't be usurped by larger blue chip companies. We live in a potentially dangerous, unstable world. By pricing internet stocks vs oil service stocks the way the market is, the market is assuming that the status quo will prevail indefinitely. History has shown that this is not a safe assumption. So what's it going to be-single digit or stratospheric multiples? Which is really the better bet? Does the price of a security matter?

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