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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Crimson Ghost who wrote (31761)11/12/1998 5:05:00 PM
From: JZGalt  Read Replies (1) of 95453
 
George,

Waiting for the obvious improvement in the fundamentals is probably too late as you state, however, buying in the light of DECREASING DAYRATES and CONTINUED OVERCAPACITY is also not the wisest thing to do. If you don't want to trade these stocks, then at least step aside until you see some sort of a flattening out of the rates and some improvement in the oil price situation. I'd rather risk missing the first 50% off the bottom and catch the sweet part of the rise when it comes.

I think you have to realize that in March when we got the first rebound in the sector, there were only 21 jackups within 90 days of the end of their contracts. That number has swelled to over 50 right now. Remember the Gulf can handle a few jackups being idle and not have a collapse in dayrates, but once the numbers gets as large as it is, I doubt that we will see an improvement in their fortunes anytime soon.

Avoid these stocks or trade them.
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