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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Elmer who wrote (32199)11/28/1998 2:59:00 PM
From: Big Dog  Read Replies (2) of 95453
 
elmer, you are right. But I don't agree that there "is no way we will be in the dumps for another 11 years". There is way.

I am telling you that in 1986 in the darkest hour, a person could have made a case for a renewed strong market. The case would have made perfect logical sense -- and many people made that case. But it didn't happen.

The only thing that created the boom of 1997 was high oil prices coupled with deepwater technology. Without high oil prices there would not be deepwater activity to the extent is exists today.

Sure things are different today -- on many fronts. But the fact still remains that only higher oil prices will spur more drilling which generates more service work, etc.

Is there any reason to expect prices to be higher a year from now than a week from now? Most will say yes, but that is only because a year seems like a long time and most people are optimistic and think events will change for the better over time. Just because they think it don't make it so.

As long as there is more oil produced, or capable of being produced, on a daily basis than there is demand for oil, ie. a surplus, the price of oil will not be dependent on traditional laws of supply and demand. The price will be subject to extra-market forces of which NO person can accurately predict.

To have an opinion on the price of oil service sector stocks should mean that you have an opinion on the price of oil over the next months and years. The top management in the business doesn't even get this preciction right...so how can we mere mortals?

There are lots of forces at work which a person can use to compile a forceful argument for higher oil and rig prices. And the argument may be right. But it can just as easily be wrong...history says it's wrong (except for brief periods).

Trade 'em, don't hold 'em.

big
loosbrock.com
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