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To: dfloydr who wrote (92382)	7/17/2001 12:02:12 AM
From: isopatch	Read Replies (2) \| Respond to of 95453

Floyd. How low oil prices will go also depends heavily upon how far the level of global demand is going to drop. In other words, how severe a recession are we talking about here? Honestly don't recall if I posted it here or on SA II. But for months, my view has been that the we're into an average, "garden run" Recession and Bear Market. And for ease of discussion, I'll define my terms as follows: Severe = 1973-4; Average = 1981-2; Mild = 1990-91. If a year from now, it's clear that we did have "classic", "standard", "average" magnitude events? Then George Cole may be right. My guess is we only drop below $20 briefly to "run the stops" at at the NYMEX. So as far as the prediction game is concerned? Color me "caught between the MOON and NEW YORK CITY".<g> At one sentiment extreme<g> back in Jan/Feb, strongly disagreed with the perma bull, "Moon Men" here. Now that the Bear Market has taken a huge bite out of those "under the porchers" and the downside risks are VERY obvious, we need to be careful not to swing to the other emotional extreme. YES. We have LOWER to go before we reach the final bottom. 68-72 looks like a good target for the cyclical low in the OSX, this time around. But if not... The tape will tell us when we get there if we stay alert BUT unemotional as the news gets worse. Respects to Billy Joel aside<g> New York City ain't gonna sink either. Folks, the financial news is always used to dramatize events. That's how they sell papers. But it ALSO greatly stimulates fear and gets people more and more bearish as the market goes lower. Actually, whether it's OSX 70, 60 isn't the most important thing to focus on. It too easy for traders to get overly concerned with FIXED predictions INSTEAD OF... How to preserve capital and make money in a Bear Market. Learned a long time ago that the KEY to success over the long term IS NOT predicting specific numbers far in advance of the event. There are only 3 things that matter: 1. STAYING on the right side of the trend as long as it lasts. 2. RECOGNIZING when the trend is about to change. And..... 3. PULLING THE TRIGGER WHEN IT DOES!!! Yes, I agree with Dabum, "Keep it simple" During my years as a broker, it became obvious that some people are very intelligent AND good decision makers. Over time they proved to be the consistent money makers. But another group that, at first glance, you'd think would do well? Had nothing but disappointments and losses. They tended to be nervous, over sensitive intellectuals. All the brains in the world can't make you a dime if you're too thin skinned and emotional to avoid that paralyzing fear which can so easily immobilize a susceptible trader as a good Intermediate or Long Term bottom approaches. Such people are usually too intimidated by the bad news to pull the trigger when the time comes. They remind me of good athletes that usually choke when the game is on the line. People, I had a number of brilliant college profs from several well know mid-western schools as clients. Two were department chairmen. Heck, one wrote an excellent book on investment anaylsis and management and gave me an autographed copy! And all were good friends of mine. But out of this dazing 1/2 dozen, only ONE moderately outperformed the market! And get ready for this.<g> He was a literature professor! He used a simple mechanical method to eliminate emotional decisions. The rest, including the Chair of the Dept of Business, thought they were smarter than the market. Intellectual arrogance made them stubborn and they couldn't admit mistakes or easily accept outside advice. Arguing with the market can be expensive, as I'm sure everyone here knows. Anyway 5 out of 6 underperformed the market consistently. It's not unusual to read posters on various threads that remind me a lot of those 5 professors. Intelligent, but too sensitive emotionally be good decision makers. At the top, you'd see the most impressively written posts with all kinds of convincing news stories to back them up. Problem was there were too many. Perhaps, that's one reason contrary thinking works at sentiment extremes. Although we've yet to reach that kind of extreme in bearish sentiment, there are clearly quite a few that IMHO are far too bearish. They don't come right out and say it. But the tone and constant refrain looks like a clear outline of a very severe recession or even a deflationary depression. IMO, that kind of thinking is indicative of the emotional over reaction to news I've seen from MANY times from less experienced investors who've never been through a real Bear Market. Bank on it folks. The big brokerage houses play on that fear every time we get close to an Intermediate OR Long Term low. I've been through 3 Bear Markets (4 if you count 87'). And in every one there are always extreme voices that that become increasingly popular with the majority as we get deeper into a major down trend. Negative economic and sector news become an almost obsessive focus everywhere in the financial media. As a result, an exaggerated bearishness develops. Getting caught up in that fear is just as bad as buying into the perma bull party line at the top. And you rarely recognize an important trend change. Fear prevents you from seeing it. So far, fear is NOT dominating the dialog. There are still a great many bulls out there who go long into every little upside ripple and soon get wipsawed. But when the extreme bearish view is pervasive (just as the bullish view was here in Jan/Feb except "for a few"<G>) When it does it'll be a light flashing on the market dashboard that we are getting near an important bottom. The most important thing is not to be too intimidated by bad news to see it and BUY. I'm outta here! Goodnight, and Best to all, Isopatch

To: dfloydr who wrote (92382)	7/17/2001 6:10:37 AM
From: Maurice Winn	Respond to of 95453

DR, that's all true, but it's a bit like my dearly beloved Globalstar complaining that minute prices are too low. Markets are cruelly indifferent to the profit needs, revenue expectations, customs and wishful thinking of individuals, companies or countries. If Saudi Arabia needs a lot of money from their oil to fund the manner to which they have become accustomed, let them eat cake [or sand]. The market answer to me, Globalstar and Saudi Arabia is 'Tough Tittie Mate'. If there is a surplus of oil due to a whole lot being produced and demand dropping, Saudi Arabia and the other producers can whine all they like. They can have riots too [which will probably cut their production and income further which will raise prices again - for the remaining suppliers]. Any amount of energy is available at $15 a barrel from fossil fuels. Heck, they can do deep water drilling and still make money at $15. But why bother when there is any amount easily pumped out of Russia, Saudi Arabia, Iraq, Venezuela etc, not to mention heaps of coal everywhere at prices around that level? Once the expensive wells are in the ground, they don't turn off again unless the price drops a long way from the prices used to justify the digging. Saudi Arabia and other swing producers can whip the price down, to shut down a bunch of competitors, then raise prices again. But the average is still around $15 per barrel. As you say, the big swings are very disruptive. But that's the game they like to play. Mqurice