Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: S. maltophilia who wrote (60885)	2/24/2000 6:12:00 PM
From: upanddown	Read Replies (1) \| Respond to of 95453

Astute comments from Bob Bowker on Labpuppy... labpuppy.com Between now and the OPEC meeting, we don't see a lot of potential for favorable market-moving news in this sector. Earnings season is over now, and the two topics of discussion that will dominate the markets will most likely be the Fed's clear intention to raise interest rates and OPEC's intention to raise oil output. Neither of these is particularly good for the energy sector. Today (Monday), while our markets were closed, both crude oil and the oil stocks in Europe were taken down by 1% to 3%. Therefore, despite some Technical BUY ratings, we would exercise caution next week, since we can't see anything to build any serious momentum in this sector right now. LONGER TERM, this will all prove to be quite bullish, however. To an oil company, $25 oil with a high level of confidence that it is sustainable is much more attractive than $30 oil with the knowledge that political forces all around the world are very likely to push prices down to some undetermined level. If we look past all of the smoke and noise, the underlying "problem" in the oil sector is that demand is exceeding supply and that OPEC represents the only path to bringing relief to consumers. Last year, at $11.00 oil, they were viewed as bumbling idiots for over-producing --- now, our government officials are trying to persuade them to produce more oil. OPEC must be loving it, and to us, it strongly suggests that the new-found cohesion among the OPEC ministers will be sustained for some time to come. So, we are quite Bullish over the longer-term, but we still recommend only a 50% invested strategy in this sector over the near term. THE MARKETS: The DOW is now down 13 % from its high and has dropped below its 200-day moving average. The S&P is down 9% from its highs but remains above its 200 day average. Meanwhile the Nasdaq remains near its highs and IPO's are still soaring on their debuts. We can only see one way for this unprecedented dichotomy to resolve itself. There is nothing that will make the regular, old stocks with earnings, dividends, and single-digit growth rates MORE attractive now. An 8% or 10% annual return just doesn't compare to the tech and bio-tech stocks that can move up (or down) by 8% or 10% every week or every day. It is the Nasdaq that will have to become LESS attractive in order to drive investors money back into the other sectors of the market. And the only thing that will make the Nasdaq LESS attractive is a sharp market pullback at some point. So, until that happens, we should expect more of the same - more tech mania and little-to-no interest anywhere else. Therefore, we continue to recommend a strategy of rssk-avoidance -- refraining from large new investments, and taking some profits on high P/e stocks.