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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Box-By-The-Riviera™ who wrote (34420)1/7/1999 1:27:00 PM
From: The Ox  Read Replies (2) of 95453
 
Now there's a new "frog" in town; and that's the potential "W bottom"
developing in the overall CRB commodity index. It's not fully developed, yet,
but it threatens to surprise investors mostly of the low-interest rosy
scenario ilk, considerably. First of all, it's not a risk yet because markets
very frequently see slightly higher commodity prices this time of year; second
of all Oil has been absurdly cheap, which it can't remain if Asia is indeed in
the formative stages of coming back; and third; we analytically don't see
higher commodity prices as a negative, but actually as slightly supportive to
cyclical stock earnings recoveries, and in fact ultimately a psychological
boost to all markets, as it would be a quantifiable sign that considerably
lower commodity prices (deflation) is not on tap. We made a big point last
year that deflation is bearish; inflation is bearish and that only equilibrium
is bullish; in at least a half dozen Letters. However, a short-term increase
in key commodity prices can argue that at least we're not going into a deeper
(and dangerous) big new deflation (or Depression beyond those parts of the
world already impacted).

From: decisionpoint.com
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