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

To: Think4Yourself who wrote (85400)	1/26/2001 9:52:39 AM
From: Think4Yourself	Read Replies (1) \| Respond to of 95453

KEG is cranking again this morning on high volume. Looks like whoever has been shorting it for the last year is finally covering :o)

To: Think4Yourself who wrote (85400)	1/26/2001 11:58:59 AM
From: jim_p	Read Replies (2) \| Respond to of 95453

Good point John, I'm still 70% tech and 30% oil and I was even yesterday with the NAZ down 104 points. Today with both the oils down and the NAZ down 50 points, I'm up 10K. A number of my tech's are up as much as 10% today. Stick with the low PE tech's with little or no debt and lots of cash, or the market leaders and you will do well. Jim

To: Think4Yourself who wrote (85400)	1/26/2001 12:04:59 PM
From: SliderOnTheBlack	Respond to of 95453

JQP - ie: the market looking out 6 mos forward etc... Agreed there; but what we seem to forget sometimes is this - mutual funds must allways be nearly fully invested - often having less than 3-5% cash. Fund Managers "must" buy something.... period. They can't go 50% cash if they wanted to and "that" is a significant factor here. Also; most of the analysts & the CNBC type of commentary is coming from people on whose living depends on a sustained bullmarket. If they tell you to go to "cash", or to "sell" or say to sit this one out for a while... they're out of business. Barrons had a great article profiling the top economists from the various brokerage firms as rated by Institutional Investor Magazine. Most of these guys had all been fired in the past for being too "negative/bearish" - even when reality dictated that they should have been & were ultimately proved correct. There is an ungodly amount of pressure on these people to paint a rosy picture - too allways see the cup as half full & not half empty at the least... I hear what Big Dog is saying about the drillers; they ARE the "Mambo Kings" of momenteum when things breakout late cyle; they can increase earnings faster than any other group other than unhedged E&P's in a commodity price upcycle. But, it's not as if the drillers here do not allready have the next 6 mos expectations priced in here - they obviously do - look at the PE's... The upside & the potential for the OSX to break out of this trading range and to go to new highs depends on upside suprises to analyst expectations and I am not sure if Q1 is going to bring that quite yet - as some of the commentary from the driller CEO's didn't quite place their Q1 expectations as it being an "inflection point" turn... Q2, or Q3 may be - but; it's the "Recession" overhang that continues to be underestimated in this tech rally that may cap our fundamentals in the oilpatch once again. Think about this for a minute... If last April, or May 2000; at $25 Oil & $3ish Nat Gas and at OSX 120; someone told you that in the next 6 months that Oil would ramp straight thru $35 and Nat Gas would go thru $8 & $9; but that the OSX wouldn't be any higher 9 mos later and that you could buy all the drillers & service co's and Oil Majors you wanted at lower prices; no one would have believed it... but, it happened. We can not underestimate the power of the "R" word here... We know how rapidly the Oilpatch rolled over in 1998 - into still ramping earnings. We need to remember that for the drillers - earnings didn't peak for like 9 months past when the stocks rolled over & literally died... I'd have to admit that the potential for this cycle to continue is supported by the need to keep drilling for Gas; but look at NBR, UTI, PTEN, KEG - are these cheap PE stocks ? Tell me the Street hasn't nearly fully priced future expectations & analyst estimates into these stocks allready ? That's the problem; once again it's not the end of the cycle, or the bottom that we need to be waiting to come into view on the horizon as an exit & profit taking indicator; it's the top...and if the Recession starts to hit demand; the Majors won't be in a hurry to expand Cap Ex projects and we'll rollover directly into ramping earnings just like we did in 97-98. Here is the entire OSX play in a nutshell: We are allready fullypriced on the drillers on a historic basis for 2001 eps estimates; it's only if 2002 analyst targets are reached, or exceeded that the stocks are buys here and haven't allready seen their highs last Sept at OSX 140. ** Setting new highs for the OSX here isn't about 2001 numbers; it's about 2002 numbers ** We've allready priced in very high expectations for all of 2001 here - it's when those 2002 estimates become cheap & analysts start raising 2002 numbers that the OSX will go to new highs and I don't think the Street will begin to "discount" those 2002 estimates untill we clear any & all fears of a US recession and I don't think we know the answers to that for another 4-5 months. As such; I am beginning to think that March to May "seasonal" pressure to run up the OSX may get moved back to a July, or August to Sept-Oct rally to new potential highs.... I am beginning to think the "Trading Range" is here to stay untill we absolutely are sure there will be a soft landing and no chance of a US Recession... Maybe we pullback here & base again around the mid-teens; and then mount a run thru 135ish in April, or May; but I don't think we penetrate last Sept's highs untill next fall and then & only then; if we've unquestionably cleared the "recession" hurdle... I rang the register quite a bit here today - I'll still look to keep and hold 30-35% invested long here; but I am continually rotating & consoldating that money into laggards & reloading on the bottoms of the trading range & unloading at the tops & for now; it looks like 100-135 seems like the range...with 115ish being the median fair value point. I will NOT go back to being fully invested in the Oilpatch untill I am convinced that there is not going to be a US Recession... and right now; I see one coming. It's all about the "recession" here... we've go to clear that hurdle before the OSX can go to new highs and I am beginning to think it will be at least untill mid-late summer before we can pronounce the landing as "soft" and the threat of a recession as having abated. Play the range & wait for the PGO & PDE type of blow offs that present tremendous opportunities to outperform - MAVK did that earlier & we'll continue to have more.... hell; FGH was a popper here of late; no one is going to miss anything here anytime soon. Still all about stick picking in the trading ranges ... but; I do think you can put a fork in the NG E&P pureplays... the mo-mo fav's allready saw their highs. You can trade them on the way down; but it's not high reward/low risk trading & I think come Sept-Nov of this year; one may be able to go "net short" across the board on E&P's... I think we see $4.25ish NG roll into $3.25 NG in early 2002 and return to high $2 NG by late 2002. Oil - $25ish seems supported thru 2001; but 2002 is all about demand & the econonmy & that's why XOM is so unbelieveable cheap here after just having made more money in a quarter than any company in the history of the world... amazing; closer to it's 52 week low than it's high after "that" ?!?!? How about XOM trading higher in April 1999 than April 2001 ? - compare earnings & commodity prices between those two periods..... no one; no one would believe that Oil & Gas prices & earnings could have risen from the levels they were at in April 1999 to where they are now 2 years later and conceived that XOM would be selling for less here than it was there.... simply u-n-b-e-l-i-e-v-e-a-b-l-e....but; also a great barometer on demand and the global economy... heed its warning; aint gonna be no OSX 165 with $80 XOM - bank on it people.... XOM is a barometer here - heed what its telling us. Untill there is no sign of a recession - trade the range & let the Bollinger Bands be your guide.... don't get no mo simpler dan' dat... Ciao~ & Ring that Register....