That was a referral to me from an SI friend, one of the good people, who has been in paper a good while and knows plenty in her own right. What I know of paper could be engraved on my thumbnail with space left over, which makes me hesitant to approach the sector seriously.
I'm a bit more confident (possibly a bit more deluded) on oil. I don't think it can be viewed in pure supply/demand terms: the economies on many major producers are almost totally dependent on oil revenue, and they have suffered heavily from the low prices. Their backs are to the wall, and they have no choice but to force prices up or face political collapse, which would in itself send prices up. The companies I'm in are primarily active in politically secure areas (Gulf of Mexico, North Sea), I believe the oil majors - the main customers of the service operators - will maintain their activities in these areas even if prices reach a point where they are barely profitable: they simply cannot afford to be totally dependent on areas subject to political interruption. Been talking to a lot of hardcore oil people lately, as HAL is building a platform here for Shell; interesting to look at the business from a non-investment perspective.
That said, I'm not saying I expect any of this in the short term. The stocks seem incredibly cheap, though, and well worth tucking away as medium-to-long term holdings. |
