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

To: Think4Yourself who wrote (64685)	4/15/2000 2:44:00 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

"Q" - I think PE's are meaningless in emotional selloffs... If the DOW free falls to say 7800 here, or the NASDQ just totally melts down - say to 1850; it would not matter for the OSX - we'd be looking at OSX 48-50 again - bank on it. - the ONLY thing to own would be puts, short positions,or GOLD ! What I like friday was that the OSX saw nice early morning buying rotation - real nice reaction. That was the market "tipping" its hand - that it wants to & plans to rotate here. BUT ! - when the selling reached a freefall level they exited, or our own OSX holders here started selling etc. We had Oilpatch stocks selloff in June-August of 1998 here with $2 eps earnings and single digit PE's - they got decimated. Even when Oil reached prices that were so low - everyone conceeded that they could not be sustained that low - the stocks continued to sell off and languish (the real play back then would have been to go long the commodities not the stocks...). The market bought into the NOESIS-esque (early day Kudlow-ites) (VBG) mindset that $3 to $5 Oil was coming and would stay there forever... earnings, balance sheets, revenue - nothing mattered; Institutions simply made up their minds to leave the sector - shorts piled on; We had stocks in freefall that were still very profitable and had superb PE's, Net Asset/Book Value's etc. The market made up its mind that it wanted out - and we tanked... The lesson; is that if enough people buy into the "chicken little" theory on a subsector - nothing rational matters... I reached a point, where I just sold; and later got back in and traded with what I had left and worked my way back up. The OSX legs in the fall of 1998 bounced from 45-72ish a few times back and forth and that volatility allowed me to recover my massive losses. Anyone who thinks that if Nat Gas retraces to $2-$2.40 here, or if Oil drops to $18-19 temporarilly; that the OSX can not go to 58-60 right here immediately - either wasn't here in 1998; or didn't learn.... Trust me; if I sense that enough people buy into this as being an "OPEC manipulated bubble" and that $25 Oil was an anomlay; I will have no problem selling and selling it all and stepping totally out of the market for 3-6-9 months if need be; or even going short. Actually; the one lesson that I learned that will make me lots of money; is the intellectual and emotional ability to actually "turn on my own" - and not just sell and go to cash; but to short my own stocks. Trust me; I don't think the OSX just keeps going up forever. This IS a CYCLICAL subsector - never forget that. The minute I see supply figures, trends, or continual OPEC cheating starting and we are on the downward trough side of rig utilization & dayrates; I will sell and short this sector in a heartbeat - if Crude prices also show a retracement back toward the teens. Actually; a true cyclical afficianado - should allready have shorting strategies in their gameplan; I do. We actually earn the right to profit in both directions by living & dying on a daily basis here imho. I'll be damned if part of my ultimate cycle gameplan here is not to exit the sector long and to go short - as the Oilpatch ALLWAYS comes down "HARD" on the retraces between cyclical expansions. A true cyclical investor should realize that it's only a natural part of the cycle to retrace strongly and you learn the same information on who is over bought - as who is oversold. Trust me; the day will come post peak cycle; when I look for companies that got over-leveraged too late in the cycle, for companies who got overbought etc. SII CAM BJS WFT RIG FLC PTEN UTI will ALL be great short candidates post peak cycle - especially UTI - PTEN; look at how far they have ALLWAYS fallen from peak cycles here. This is how one can stay in a sector over his investing life and really make money in up & down markets. Cyclical investors who just sell and exit - or hold their stocks through 75% downside corrections only to wait two years for them to recover shouldn't be in cyclicals imho... becuase unlike IBM AT&T WAL MART etc. We should allready know that our stock will strongly retrace to riduclous price levels sooner, or later. In the overall market; I am really curious about the mutual fund managers of these tech & iNet speciality funds - how they react. It is NOT the margin call selling of individual investors that could trigger another massive leg down; but the redemptions from mutual funds that could imho. I am curious to see how these fund managers react to potentially having to show a quarter - being down 20-30% poetentially - think how investors will react to receiving those quarterly reports, or reading about "their" sectors performance - compared to ohhh say the "OSX" for example... It's going to be interesting. Actually - unlike the Russian & Long Term Capital triggered crisis of 1998; there is no real market event here. I dont know where the NASDQ, or the DOW bottom at - I am not following those indicies that closely; but - I would not be surprised to see strong buying and a huge bounce that actually starts monday. The only thing that I think that does not ever come back; is the 2nd & 3rd tier iNets without any earnings, or immediate outlook for such. I bet the folks over at the Anthony@Pacific thread are "makin the bacon" shorting those pretenders here... PS - anyone else looking to see how high GOLD & Gold Stocks go - as a barometer on how severe this sell off might be ? Can we sell off another 15-20% without Gold immediately going through the roof first ? - comments ? I may start leveraging Gold stocks 2:1 for each 10% retrace in the OSX here. I'll sell 20% of my holdings for each 10% move down here in the OSX - leveraging Gold long simultaneously.