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

To: rocklobster who wrote (79336)	11/18/2000 10:24:28 AM
From: SliderOnTheBlack	Respond to of 95453

rocklobster... good for you; the "Big & Easy" money just aint out there... Unfortunately; I honestly think that a huge % of traders have to "do something" - literally force trades, analyze & re-analyze to the point that they find something to trade/buy etc... I don't know if I would go so far as to call it an "addiction" - it's maybe similar to teaching a hitter in baseball to "take pitches" , be patient at the plate, or for a Footbal QB to either "throw the ball away", or to eat it & go down; vs. trying to force a play & throwing an interception... There are obviously times when the volatility is exaggerated by too many extraneous events controlling the markets & no one - nobody can predict, or trade these events. Sometimes it only makes sense to be partially in and NOT actively trading; or to even be totally out and on the sidelines for a period of time. We've certainly had Bear Markets in the past that lasted longer & went deeper than anyone imagined. I don't think I am unique in this mindset; but I view the last couple of years in this still new "online trading" environment - atop the crescendo top of one of the greatest bull markets in history; as a bit of a gift horse opportunity of a lifetime and I absolutely refuse to give back any significant portion of these gains. I made sure I wouldn't by taking the majority of my money out of the market in August & putting it to work in business. I will only "play" with a moderate percentage of my profits from the last couple of years. And I am not willing to give much of that back to the market either. In the Oilpatch; if we do see an Oct 97-esque type of mid-cycle correction here; it will probably take at least untill late Feb-March to mount a breakout leg rally and if the Oil Majors are waiting to see where both Crude Oil Prices "and" the US Economy (Crude Demand) - "soft land" in 2001; it may be Q3 before the Cap Ex $ spending accelerates to levels supportive of a new leg up; let alone new highs. 97-98 taught some good lessons; but only if they are heeded. One of those lessons is that it does not matter how high O&G prices are; but only that they have begin to fall. Once that "turn" takes place - an entire investor class leaves the oilpatch and while the initial exit is often volatile - there is also a slow grinding sell down to much of the institutional exit. The cyclical aspect of the patch is what is dangerous here. Is this the pause that refreshes; before mounting an even longer & more prolonged upturn to new highs; or is it a pause; only to soon start the downward slope of the cycle ? - that's the call. Because those strong upside earnings forecasts don't matter - becasue in 1998 the OSX sold off & collapsed 6-9-12 months before earnings did. It collapsed into ramping, very, very strong earnings. We had stocks imploding while setting record earnings then - but; it was because the market was focused well beyond the next 6-9 mos and saw the slowing cap ex $; saw the inventory builds far out; which would tank commodity prices - albeit; no one envisioned the levels that they eventually fell to... I think the key to the OSX here; is where the US Economy is going to "soft land" to in 2001. One has to remember that we've been buying all those imported goods - so cheaply of late with our King Dollar; that all those Euro & Asian companies have been strong due to our buying their goods. If we enter a recession - not only does our economy slow( and our crude oil demand) - but; we slow their economies and Oil demand as well. And if we are going into a "softer" landing than many expect - then the downward slope to the OSX cycle has allready occured & we aren't going back to the old highs; let alone setting any new ones & the game is over... walk away, or try to profitably trade a down cycle. If one see's a US recession, or a softer landing/slower economy than forecasted - exit the patch - game's over. Me; I've got one foot outside & the other in the exit door... I'll error on the side of being conservative here. I'll watch rig counts & dayrates for the drillers and watch cap ex projects in service & mfg. Again the tubulars may be a good subsector to watch; if MVK climbs back to the mid $20's - that may be a positive sign. If the tubulars don't come back; then their early warning/primary indicator ability of the end of the last cycle in 97-98 is intact. Also; as others have stated her before; the XOI may be a better longterm indicator of OSX health than the what the smaller more pureplay independant E&P's do here. Actually; I am salivating at the chance to short the NG pureplay E&P's if we see a Winter Weather related NG spike - as it's a no-brainer and will be "Big & Easy" money on the downside. $8 NG will surely ring the register for these companies & even if we see $3.75-$4.25 NG for a couple of qtrs - once we start to exit peak demand winter season, or get that first warm front - post the spike; these stocks will blow off. They did in Sept 1999, the did this year and they will again. The street has shown us consistantly how they will trade these stocks. Here is an opportunity for the more savy traders on this thread to learn something - sell to the greater fools. CNBC will be hyping the Nat Gas stocks - record earnings, alltime commodity price highs - the analysts will all have them atop their "pick" lists - the mo-mo players & daytraders will flock in.... and THAT is when they should be dumped AND shorted. - learn how to play the cyclicals... this industry owes us money on both the upside & the downside ! It's a fools game to learn this industry; to know its fundamentals - to know all the players, the managements , the small subsector niches etc & then not play them to the downside as well. In the NAZ ? - I have no idea - literally. Imho; it's all about "valuations" - as there is certainly no question about the growth prospects in many of these companies & industries. It's strictly a matter of how do you value them ? I think until we get the final washout of all of these "junk IPO's" - and maybe even an Amazon.com - that we haven't cleansed the market & formed a bottom. I also think that NAZ stocks must quit opening up 30-50% down off of minor news, a small earnings/revenue miss - or even merely a warning from a peer. This reaction clearly tells us that we are still in a "bubble" valuationwise. In healthy fair valued markets - these type of overnight market cap haircuts simply do not and can not occur with the regularity they do. Untill this gets all washed out - I honestly & sincerely do not understand how anyone can "invest" in the NAZ/Tech. "Trade" ? - perhaps; but the odds are better than even; that one will have to trade profitably in an environment of 500 points up; but 700 points down - with 40% market cap haircut -hand grenades going off all around... I don't know about anyone else; but I "aint" interested in that type of action... - and then we've got the Election Debacle - tic toc... and remember; we need foreign investment to hold this market together; without them buying our dollar, our equities and our debt; - down we go... and they'd be crazy to stay fully invested here... wonder how that Saudi Prince feels that just bought all that WCOM, PCLN etc...? Do they want to be the greatest of all the greater fools much longer ?