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

To: Post_Patrol who wrote (63131)	3/28/2000 9:25:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Postal; C'mon with the "chicken little act"... you're just pulling our leg - right ? The story is that the cheating above prior quota's will be factored into the new production quota's. This increase is entirely a political "bone" thrown to the West - period ! (PS - these guys have some damn nice tailors don't they - nice suits...). OPEC has no fundamental reason to increase production directly into the exact seasonal period of a demand reduction and in essence; they are NOT ! This 1.7 M boe increase will have 1.5 M boe of "cheating" subtracted out of it for a "NET" increase of 200,000 BOE - yes, two hundred measley THOUSAND boe. A symbolic and not a substantive increase... Thank You OPEC - as you have just put a floor under Crude Oil prices and you've given the Oil Majors the green light to increase prior budgets & cap Ex spending plans, the ability to go forward on some marginable projects etc. Most importantly, you've lit the potential candle under the Majors, Mini's & Integrated's & Independant E&P's which have lagged the OSX driller & service plays. Ironically the E&P side actually has vastly superior bottomline fundamentals to the driller, or service companies here and will be the subsector that will show the best earnings visibility, upside for revisions etc. Stocks like TX BPA COCb MRO UCL P will breakout now. The risk vs. reward play is in these names. RISK seems to be the forgotten factor here. Should any suprise reactions be seen; the SII BJS ESV's of the OSX surely can see immediate 15-20% retraces from their lofty highs - which becomes a 30-40% hit to capital if on margin. Personally, this breakout is one to leverage, margin for aggressive traders; but when factoring risk and not gambling; the smart play is to leverage the bottom supported, strong fundamental laggards here like the majors, mini's & integrateds. While the OSX could still easilly outpace the major-mini-integrated's on a nearterm % basis; when one factors risk - the only sector that makes sense to margin/leverage here is the major-mini-integrated's imo. I'll outpace the OSX gains by safely leveraging these laggards near their well supported bottoms here. I would take "some" profits in the likes of BJS SII ESV & other momenteum players in the OSX, but I would NOT close out entire positions in any of them. I would also rotate the money to OSX laggards like PGO and HAL here & on any further weakness, staying fully invested. For aggressive traders/investors - I'd be looking to margin/leverage the valuation anomalies in these stocks here and on any & all further weakness. Postal; OPEC is NOT increasing production enough to even neutralize the dangerous decline in global supply; we will not only put a floor under crude - we will ultimately re-visit $30+ - bank on it. Any re-trace in the OSX represents rotation opportunity; not exit opportunity imho... but any new money; other than perhaps to PGO HAL should go to the majors, mini's & Integrateds - to the E&P side imo. FWIW; I now have 35% in OSX driller & service (HAL BHI RIG FLC GLM largest plays),10% in a mixed bag of small & micro caps, 25% in mid cap E&P's, 30% in majors, mini's & Integrated large caps - and my margin leverage is in PGO and the major-mini-integrateds. Atop my buy - watch list is further weakness in: PGO HAL FLC - I'd add on every retrace thru the entire cycle. TX UCL MRO COCb BPA BSNX - anytime sub 11 1/2 I'm allready loaded in other names - no reason to add, and am looking to add these names above. We shall see in due time. I think all OPEC did here was to re-fuel the Boom 2000 Super Train - better get aboard Postal, the tickets get real expensive down the track... ciao~