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: SliderOnTheBlack who wrote (80596)	12/2/2000 9:28:46 PM
From: Second_Titan	Respond to of 95453

OSX vs Worldwide Rig Count Slider you have said many times that OSX sold off in 97/98 in the face of strong earnings growth and I believe you have said fundamentals were strong as well. Looking strictly at the OSX index and the BHI worldwide rig count it is not hard to believe that institutions were selling off OSX at peak worldwide rig counts, especially when the peak was followed by a rapid decrease in activity of 25% (400 rigs~). Just as surprising in the face of a further decreasing rig count the OSX rallied in April/May 98. Of course I dont know how far ahead investors could see and fully appreciate the down trend in activity. Comparing recent OSX activity to the 97/98 period shows that we reached more or less the same peak of OSX 140 with about 10% less overall worldwide rig count. Also this recent peak was reached well ahead of sustained high worldwide rig counts. The 15 months ending March 98 had an average RIG count of 2150. By October 2000 we have just about reach 2,150 with a 15 month average of 1750. I dont know what the forward earnings projections were during this 15 month period of sustained activity level but the activity supported an OSX of 120 - 140 for a good part of it. I imagine there are other factors that factor into determining stock prices and OSX level. But it sure seems that our recent peak of OSX 140 was well ahead of market activity levels from the previous cycle. If I had done my DD better, I suppose I would have appreciated this more and sold off last September. But as long as the worldwide rig count is improving or holding steady, quarter over quarter we should be doing better in the OSX.

To: SliderOnTheBlack who wrote (80596)	12/5/2000 2:24:24 PM
From: stsimon	Read Replies (1) \| Respond to of 95453

No question that your call in August was absolutely correct. I just didn't see the same level of pullback as in 1997. I would be very surprised of we don't rally to new highs on the OSX in Q1. You are also correct that these are not buy-and-hold growth stocks. I'm not saying that timing is unimportant, just that this pullback is likely to be less severe than 1997 and that I'm prepared to ride it out rather than pay the taxes. If I felt it was going to be as bad as 1997 I would have sold too. You could well turn out to be right that it would have been smarter to have sold in August, but that's what makes markets.