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

To: Frank Pembleton who wrote (92757)	7/25/2001 11:58:52 PM
From: Sharp_End_Of_Drill	Read Replies (1) \| Respond to of 95453

Fpembleton, I believe we think along very similar lines. For the last nine years or so I've maintained a spreadsheet with quarterly financial information for a slew of companies that I follow. Working with the figures over time gives you insight into what they really mean, and more importantly gives you a good tool for relative rankings and absolute valuations. Knowing about the inner workings of the companies, quality of assets & management makes the tool all the more powerful. Throw in a general market trend and you've got the odds strongly in your favor. Interestingly enough when I've posted my analysis in the past practically nobody was interested - makes me wonder what thought process others are using. And finally, as you allude to the key is projecting the future quarters results, which is probably impossible if you don't track the past & current in this type of way. I like to look out at least eight quarters, and I revise those projections according to any changes to the story. I agree P/B and market cap/ounces are good measures, but just like for E&P companies those metrics are very easily cooked. I would only use them if I had some faith in the company, and most small PMs have a high snake oil content that casts more than a little doubt. I much prefer a combination of PSR, net margin, and CF/s - and more importantly how those trend over time. In other words - show me the money! I'm not so sure I believe the $350 gold story in the short term, and like another poster noted $290 is basically dead money. Gold for me is more of a psychological play, but one that I'm questioning more and more each day based on those good old fundamentals. I was there crunching the oil patch numbers all through '98, '99, and '00 and can vouch that there were bargains then that were much better than current PSRs of 2+. There are in fact several out there right now after this drop we've had. Thanks for providing a very thoughtful sounding board for me to work out my own beliefs. My plan is to significantly lighten up soon in favor of cash. PMs are not my strength, just a stepping stone on a short term path I've chosen to take. Tempelton has said he wouldn't be in this market at all, and that is powerful advice. Sharp