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

To: Sweet Ol who wrote (92686)	7/23/2001 12:34:24 PM
From: Frank Pembleton	Read Replies (1) \| Respond to of 95453

1/3 of the way into a down cycle Do you mean there's a 66.6% more downside? Regards Frank P.

To: Sweet Ol who wrote (92686)	7/23/2001 6:54:31 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 95453

>>Look at the long term prices of some of the companies and you will see the cycles.<< John, I prefer to look at individual companies, precisely because individual companies may not exhibit the characteristics of the whole group. Thus, if the price-earnings ratio for an oil/gas producer is lower than the PE for a company with comparable growth, then I wonder if the company with the lower PE isn't potentially a better investment. I look for anomalies, whether in oil, telecommunications, drugs, or whatever. It's the herd mentality that groups companies together, good and bad, and that frequently overlooks a good value. I think the herd mentality is in evidence now. Some oil companies may undoubtedly be overpriced, but on the other hand, some appear to be oversold on the basis of their PE or other statistics. People are running for the exits, creating some very attractive values for the so-called forgotten stocks. Here's the dilemma for investors: If oil prices are in a long term down trend (which I don't believe is true, but some people here obviously do), then the producers will suffer somewhat and the integrated companies that produce, refine and market will do relatively better because of the higher margins on refinery output. If oil prices remain stable or increase slightly (as the OPEC nations appear to have agreed to), then a great many producers will be able to make a decent profit. I'm excluding the producers of more exotic resources, such as tar sands, as the more difficult extraction costs may not be economical until crude prices get much higher. My own preferences for each of these types of companies are (1) Unocal for the producer group, and (2) Murphy and BP Amoco for the integrated companies, with Murphy a little better on the oil side and BP Amoco with the best reserves of natural gas (in North America anyhow). I'd be interested in your views on these stocks. Art