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: Eclectus who wrote (89342)	3/28/2001 7:46:39 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

Electus re: [[Why wouldn’t these same "Institutional Managers who got so badly burned on the 97-98 cycle collapse" be gun shy with the "Techs" for similar reasons?]] Electus - good point & great question, very valid & a good observation... The first concept is while both Oils & Technology have cyclical components; that the Technology revolution is still in its infancy is undeniable and the LT "GROWTH" vs. cyclical characteristics of the next 3-5-7 years of the technology cycle, far outweigh those same characteristics in the more commodity price oriented nature of the Oilpatch cycle. While both have strong cyclical components to the downside; the Longterm upside growth factors within TECH - far outweigh those same LT growth characteristics in Oil. Also; if you take out the recent "bubble blip in valuations of tech stocks; I think that traditionally; the downward side of the cyclical cycle in tech is much more "smoothed out" and traditionally (this bubble excepted) will offer less downside volatility than we see in Oils. While your cyclical "downside" point in comparing the "recent" Tech collapse vs. Oils has some validity; I think much (not all) of the validity is of a 'one-time" nature due to the uniqueness of the NAZ/Tech bubble. I think you will also find than non-energy speciality funds & mgrs; which make up the vast majority of mutual funds & institutional funds/mgrs - will completely exit the Oil sector on a regular cyclical basis. They will enter & exit on the cycles - and when they exit the cycle - they literally hold zero/no Oil exposure in many, if not most cases. Maybe the ultra-large cap funds hold some XOM, some Utilities, a DYN, or ENE for exposure; but when we talk about the stocks traded & owned here (the RIG NE PTEN XTO CRK DNR's) - the OSX stocks & mid/sm cap E&Ps; those stocks are exited from completely during cyclical rollover by many, many funds & mgrs. These same funds/mgrs however, allways continue to hold core positions in broad based technology stocks even on the downward slope of the cyclical downturn of tech. They may trim CSCO, INTC, SUNW, EMC, ORCL, etc - but, they will continue to hold them & hold them large. Also; the 3rd component - is the sheer SIZE of the NASDQ vs. the XOI, XNG & OSX... a whale vs a minnow comparison - which endorses the last point above; about how TECH will ALLWAYS still be held even during the downside of the tech cycles - while much of the Oilpatch gets literally dumped by these same funds & mgrs. While the cyclical comparisons of both sectors is somewhat valid; the positive LT growth characteristics & the SIZE component of the Tech Sector - makes it much, much less vulnerable in the "longterm" to the cyclical sentiment of the Street. ... that's my opinion anyway.