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To: John Carpenter who wrote (48631)	7/30/1999 12:39:00 PM
From: Jacob Snyder	Respond to of 95453

Actually, you're right. It's not fair to value a cyclical stock using trough earnings. And you may be correct about RIG's EPS in 2002-2003. My main concern is that 2002-2003 is a long, long time from now. I've spent a lot more time studying (and have a lot more money in) semiconductor equipment stocks. That's another cyclical industry, where sales are dependant on marginal demand in their customer's businesses. After reading everything I could find about the industry for a couple of years, I came to the conclusion that noone had any visibility beyond about 6 months. The accuracy of predictions (for sales, profits,margins, demand), further in the future than 6 months, was so poor, that all those predictions were meaningless. The proof of this is to periodically print out whatever you think is the best available analysis (or write it yourself), then put it away in a folder for a year, and then reread it. Do this for a few years and you will be humbled. I was. Who was predicting in December 1997 that oil would be at 10$ in 12 months? Who was predicting in December 1998 that oil would be at 20$ by now? I sold all my RIG at 31 1/16 this morning. Made 20% pretax in 80 days. My portfolio is now 25% cash. I predict my limit order to buy RIG (for the third time this year) at 25 will clear sometime in the next 3 months.