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

To: Tomas who wrote (64328)	4/11/2000 6:13:00 PM
From: Tomas	Read Replies (1) \| Respond to of 95453

Look for the ones with picks and shovels - The analogy between the growth of energy and e-commerce Houston Business Journal, April 10 Bill Schadewald Most giant industries go through an early process of growing pains. Chaotic birth is followed by a period of wild speculation. Next comes a process of consolidation, where the small fish are swallowed by predatory sharks to create corporate whales. Ultimately, a single leviathan emerges as a so-called monopoly. At this point, the federal government steps in with its antitrust harpoon and proceeds to puncture everybody's boat. The oil business is a case in point. When the first crude gushed from Spindletop almost a century ago, the result was immediate turmoil. Every wildcatter with a promising lease became an investment target. Hundreds of companies were formed for the purpose of selling stock to a public greedy for more. Fortunes were made and lost overnight as the majority of these companies merged, sold out or sank into insolvency. Eventually, Standard Oil came out of the pack to reign over the oil patch. The feds, in their finite wisdom, saw this as a threat to the sacred precept of healthy business competition and broke mighty Standard into a bevy of separate companies. Who knows what might have happened if the dismantling had never taken place. Why, we might even be paying almost $2 for a gallon of gas today. Now, fast-forward to modern times for a potential rerun of the same scenario. For the past several years, the young e-commerce industry has been in the throes of mass confusion. Investors have bet billions on fledgling firms with nothing more than a vision and a Web site. Cyberfortunes have been made and lost in a single day on dot-coms with no assets and only virtual value. In recent months, major mergers and acquisitions have weeded out many of the weaklings and have thinned the ranks of electronic players. This week, a federal judge slapped Microsoft with harsh sanctions as the government mulls plans to break up the monopolistic software company, which will supposedly open the gates to fair competition. Sound familiar? The analogy between the growth of energy and e-commerce goes deeper than that. Much of the money made in the oil business has been raked in by companies that had no direct interest in dinosaur wine. They came along and provided necessary products at opportune times, everything from drill bits and valves to rigs and pipe. They are comparable to the merchants who made a bundle by selling picks and shovels to miners during the gold rush without ever turning over any dirt. The survivors of this week's investment bloodbath on Nasdaq -- and other major shakeouts sure to come -- will be the ones selling real picks and shovels as opposed to pipe dreams. Companies that come up with the best products, from hardware and software to modems and microchips, will continue to pay off in gold in the long run. It's interesting to note that the direct descendent of Standard, Exxon, is still the oil industry's top-ranked heavyweight. So Bill Gates, like John D. Rockefeller before him, might still wind up having the last laugh yet. bizjournals.com Bill Schadewald, Houston Business Journal editor, can be reached by e-mail at bschadewald@amcity.com.

To: Tomas who wrote (64328)	4/11/2000 6:36:00 PM
From: upanddown	Read Replies (1) \| Respond to of 95453

Tomas I think this band concept may eventually prove to be a very strong weapon in OPEC's arsenal. The oil shorts will always have to worry about a quick reduction in output. This was not a problem in the past because OPEC has traditionally been very sluggish in responding to deteriorating market conditions. The shorts will definitely test them to see whether they mean it. If they burn the shorts once, they will be twice-shy. Does anyone have the pre-API guesses? Never saw them. John