Buy all the CXIPY PGO SCSWF CDIS & especially GLBL you can !
Add the top tier of RIG RON WFT ; also FGII VRC DRQ VTS
...average into these on the way down; (averaging in - is key vs. lump sum buy ins) take a 12-18-36 month sabatical & come back a rich hombre.For the ultra-aggressive; which I am - buying at and below the prior lows on margin is an historic opportunity. FGII @ $8, RIG @ $18, RON @ $16 - and I will liquidate assets to own these at max margin.Crazy ? Boasting ? No; simply an historic mathematical/economic anomally that I will sieze. We have a supply and demand imbalance. Nothing more, nothing less ! We also have the ability to throw money at the demand side which absolutely will tip the scales one way or the other. This is literally as simple as betting on which way the scales will tilt (demand vs supply imbalance) and I get to place my bet; AFTER getting to see the operators of the scale (Greenspan & Co) throw a huge pile of money & policies into the mix... Now what kind of bet am I ''really'' making here ? IMHO; It's not even a bet; I allready know the outcome; I know which way the scales are going to tilt ! - it's just a matter of WHEN !
What possible longterm downside is there at these prices ? Fundamentaly what downside, demand-wise (and this is the ONLY downside factor) is left ? Especially in the face of what Japan is doing, what we are doing for Brazil, what the FED cuts and International stimulus packages are doing ?
Funny how ALL the International Integrated Oils were up big, 75% of the E&P's, Refiners and Domestic Integrated Oils were up; but the Driller& Service stocks were ALL DOWN - on lowww volume . Yes; I know the big NYC traders were not on Wall Street for the most part Friday; but does anyone think they were not watching their money ? Yes; we are going lower; but will most likely base and imho; have one more 30-50% run up in December.Watch the traders take their overall market profits at the top here; and them rotate into the oversold sectors of which the oilpatch is stop #1... Great for trading; incredibly great for the longterm holders here. No we will not see RIG @ $60 or FGII @ $36 overnight; but we WILL see them at those prices again. The important fact is that we have just seen the OSX stocks make not just one, but two, 30-60% runs. Why wouldn't I take the bet a third time ? As far as I can see into the horizon, things are getting better not worse; and I have $195 Billion at my back in Asia/Japan; I have that Phoenix called China; the EU and the Fed behind me ! - Fear ? Hell no... the only thing needed here is money and patience - period.
What possible major, longterm downside exists in RIG @ 25-6 or RON @ $23-4 ? With them having traded at the mid-upper $30's (+50%) mere days/weeks ago; not once, but twice !?! Nothing fundamentally has changed; we still have Crude Prices artifically depressed by traders, the point on the Venezeulan Election was a very good one; OPEC is much, much smarter than people are giving them credit for... All of the Shut in Wells that aren't profitable here, all the reduced drilling and postponed E&P projects, all the OPEC cuts - WILL have an effect. No one seems to give credence to the sheer mathematics that the OPEC cuts have had; we are slowly and steadilly drawing down supply overhang. It is only a matter of time untill we would be in balance with absolutely no increase in demand. But; we WILL have; and in fact, still do have a slight worldwide increase in demand even now. Factor in the Phantom 300 Million Barrels of Oil and the conflicting API & EIA #'s.. or the undeniable effect of the Greatest Worlwide Stimulus Package in History, affecting literally ever corner of the Globe. On an Internationally coordinated level we are driving demand in a big way. In fact it will cause inflation (read commodity inflation) to a large extent, sooner or later. We will (imho) have a spike in demand; not a slow steady ramp up; but a rubber band effect. Which side do you want to be on when this happens ? Personally; I take the side of the Carl Palmer's, William Dore's, Richard Rainwater's & Hicks Muse; I'll put my money where theirs is; not just because ''they'' are putting their money where their mouths are, but because it is a matter of not if, but just when...
Those wise old sages from the Oilpatch who said if we ever see $9 Oil, that we will also most definitely see $25 Oil; are exactly right... and if I remember what my Momma taught me; I believe I want to be doing the buying at $9 and the selling at $25...<VBG>.
Exxon & Mobil will save hundreds of Millions of $ in cost saving synergies in their merger; they will have MUCH MORE $ for E&P NOT less !!!!!!!!!!! Trust me; projects which can be started now, contracted for - with locked in ''cheap'' multi-year terms; versus negotiating more expensive dayrates next year or 2 years from now, are what will happen. The majors have to replace/grow reserves; they know the rebound facing them demand-wise soon. They know that prices return to equilibrium, all ways have, all ways do.These mergers are NOT so much about survival, as they are about earnings performance & shareholder expectations. In the mid & longterm the drillers & service companies will win. Who do you think picks up the slack when Exxon, Mobil or even SLB, BHI or HAL trim back or eliminate certain divisions ? The little guys win; they pick up the slack, become the subcontractors etc. There will be more E&P in the future not less. Sure some weak players will perhaps fall or be eaten; but this is nothing new; and in fact is the very reason why comparing GLM or SLB today; to their stockprices 10 years ago is irrelevant; they are NOT the same companies as they were 10 years ago. These leaner, meaner companies will give us huge, literally huge, year over year & quarter over quarter EPS gains in the future; and those huge, year over year/quarter over quarter EPS gains are what will fire the OSX to very profitable levels from here longterm. 1999/2000 will be nothing but money imho.
If there was a longterm fundamental problem with crude oil prices the majors, refiners, integrated & E&P companies would be tanking; irregardless of merger mania.... they are not; as much of todays current prices are artifically depressed by market traders. Gotta see the trees and not just the forrest here... 'Tis allways darkest right before the Dawn... the greatest opportunities to buy, occur simultaneous to the worst time to sell; which is exactly when everyone else is selling.... problem is; very, very few ever see the opportunity in negative enviroments. The fear of failure is a much stronger human emotion and motivating factor than the reward of success or profit; remember this; play on this human emotion - that fear will over-ride logic everytime; and you will makes lots of money imho. |
