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

To: diana g who wrote (85826)	1/31/2001 10:24:51 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 95453

Diana, you are absolutely right about it being a personal decision. I get offended by people who try to tell me my timing is off. Given the obviously oversold Nasdaq in late december no one who sat on cash for the last month is qualified to make comments about timing. Have had 5 of my energy holdings bought out in the past year. The announcements tend to come during these pullbacks. Most of my energy holdings are considered by the media/analysts to be good take out candidates. Most are also actively buying back their stock. The last few times the pullbacks ended the stocks popped at the open, leaving the traders out in the cold and looking for the less desireable "laggards". Lots of comments on this thread by traders last year demonstrate this. I don't know when the pullback will end thus see no advantage to selling. Since the tech runup has totally swamped the energy pullback the comments about my "losses" have me laughing all the way to the bank.

To: diana g who wrote (85826)	2/1/2001 12:17:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

I do not see the difficulty in understanding the E&P situation here. Simpletonian concept #1. … we've allready seen the cycle peak for commodity prices; ie: $35+ Crude Oil and $9 Nat Gas. The "smart money" is also "Big Money" in the Oilpatch and they are never interested in catching the final top in ANY cyclical sector - with the keyword being "cyclical"… Smart & Big Money left the oilpatch in late August-Early Sept; as they allways exit and rightfully so; upon what they view as the peak in commodity prices. They did in Oct 97 as well; 9-12 15 mos before earnings peaked in many Oilpatch stocks. The momenteum players are who took the Nat Gas pureplays to new highs in Nov & Dec as they were playing the weather and the California Crisis. I think I more than a few times mentioned that this was a time value of money/ discounting mechanism - with the elephants most assuredly heading en-masse for those very narrow exit doors prior to Winters peak demand season ending. Did everyone think that all that mo-mo money would stay here untill the last snowfall in March , or what ? That was a fools game; with very poor risk vs reward opportunities; the average threadster here from my observation rode the XTO's of the sector form $20 to $30 and right back down to $20… I'd suggest that threadsters go back & study the charts of the various subsectors and see how they performed in the 97-98 cycle. I acknowlege that this cycle is not identical to, nor does it possess the same "drivers" as the last cycle; but the fundamental concepts are the same. The E&P's for the most part reached their peak in that Oct 97 timeframe - as did commodity prices and they never rebounded to former, let alone new highs in the spring 98 late cycle rally. In that late cycle rally drillers, seismic & offshore const & fab's set new highs… We know what's late cycle here and we know who will have the Earnings momenteum & growth from the end of 2001 to the 1st half of 2002 and "that" is where the Street will be looking numberswise during this coming March to May rally window. What will bring the momenteum money back to the OSX is earnings momenteum - momenteum that exceeds that of Tech in most cases. The OSX earnings visisbility here is excellent and earnings momenteum will allways attract money flows; especially given its strength directly into a slowing economy & contracting Tech eps & revenue growth expectations. Quite contrary to JQP's denial of the Nat Gas rollover & rewrite of reality attempts and John C Clarkes most recent misconception; the Street is NOT waiting for the "ARRIVAL" of negative comps; rather it is merely waiting for their "APPEARANCE" to come into view and it has come into view… yes; it may be Q4 untill negative comps actually arrive (earlier for the oilier names and no one said it was this qtr, or the next ?) but we allready clearly see them coming & know they will arrive soon enough; - so why would anyone want to attempt to run up the E&P's to new highs during the next 3 qtrs right against the inevitable window where they will collapse compwise; when the drillers & some service companies will be doing the exact opposite & ramping earnings exponentially in some cases ? Many service & driller companies will show 50% to 100% increases in eps from 2001 to 2002; the vast majority of E&P's will not; they will show negative year, over year eps estimates for 2002 compared to 2001. So where do you think the Oilpatch money is going to rotate, or flow to shortly ? Where did it rotate , or flow to latecycle in 97-98 ? PS Di; you confuse me; E&P market cap is a pimple on the Tech Elephants Ass - Tech will certainly draw some momenteum money from the Oilpatch; but that is a minor factor as compared to the cold stark undeniable reality that negative comps have clearly come into view here and that we've allready seen & exited the peak cycle commodity price environment…. That equals "game, set & match" for new highs for the E&P's. Also; why would you want to return to the E&P's "later" - as the later you plan to re-enter, the closer you get to negative comps ? That is not to say however that there will not be some bounces, or indiviudal stories within the E&P sector. Blatant valuation laggards selling for 2-3 x cfps here surely have some remaining potential upside, financial turnaround/balance sheet repair stories do as well; as do takeout plays and those few companies who have significant exploration, or production growth upside. But, to think that the Street is going to take the E&P's to new highs in a mid-$20's Crude Oil & $4-$6 Nat Gas environment versus a $35 Crude Oil and $9 Nat Gas environment and given the slowing US economy & the exit from peak winter demand season; is wishfull thinking; especially given the now superior 2002 to 2001 eps estimates for the drillers & late cycle service stocks and their competition for Oilpatch capital AND momenteum money. I think we've got a 3 month window here before Q1 Tech earnings come out - which "could" potentially become THE market rally spoiler; that will allow a nice March to April OSX rally. If it looks like we can liquify & rate cut - "buy" our way out of a recession and if the worst of the downturn is contained in the auto & old economy manufacturing sector; then perhaps we can see not just a new alltime high for the OSX; but ultimately perhaps even that OSX 200 level next year that is fundamentally obtainable based upon 2002 estimates