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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Cogito Ergo Sum who wrote (266)	8/21/2001 1:42:08 AM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 36161

cbs.marketwatch.com

To: Cogito Ergo Sum who wrote (266)	8/21/2001 10:42:08 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 36161

KastelCo--Since I don't follow stocks like AEC, which trade on the Toronto exchange, I don't know whether there are any options offered for these smaller issues. In general, it is fairly risky to trade options that have a limited market, because of the market where they are being traded, or simply because of limited trading activity. Because I follow issues that are easier to research (for me, that is), I tend to stick to much larger companies, such as Unocal. The potential appreciation of these larger companies is going to be less than that from smaller, more specialized firms, but the market for the stock and the options is more well known and organized, and more likely to cause purchases and sales to be more in line with what one would expect in a free market. In terms of a buying decision (for the stock, that is), I would compare some of the fundamentals for similar stocks. In this regard, as an example, the price-earnings ratio for Unocal has been consistently below that for similar oil and gas producers, and even for the more stable integrated companies. Thus, in my view, the stock would be a reasonable buy candidate, notwithstanding the pessimism of some of those on this thread, who think that falling oil and gas prices mean the end of the boom. At the same time, because the stock looks somewhat underpriced in comparison to other similar companies, I would not be interested in selling covered calls, at least until the stock moves up somewhat. After all, the purpose of selling covered calls is not just to hedge the purchase of the underlying stock but to lock in PROFITS accruing from the underlying stock. Art

To: Cogito Ergo Sum who wrote (266)	8/21/2001 12:27:10 PM
From: jim black	Read Replies (2) \| Respond to of 36161

KastelCo & Art, I have been looking for the same play in the patch despite the apparent truth that Slider keeps repeating like a mantra, that this is a cyclical industry. I cannot get away from a fascination with what ought to be (must be very careful with this concept) " fundamental longterm plays in this industry". I too watch AOG=AEC.Tor and try to follow news on the Toronto Exchange. There is limited info available under various headings when clicking into a particular company at tse.com. What concerns me is that I don't have access to in depth coverage of a company in Canada. I too am intrigued by what ought to be a good play in Unocal. For one, they have been the topic of takeover speculation in Valueline summary for years. I have learned to take Valueline with a certain measure of salt, eg, their gushing forecasts of two stocks I lost money in, Worldcom and Loral, and they were pessimistic as I rode (scared shitless I should add) another past favorite, Qualcomm for a quarter mil, making my Keogh much healthier. My major concerns in both Unocal and another one I have been watching, Occidental, are twofold, DEBT!!! and foreign exposure in political minefields. The Valueline summary is somewhat forbidding in its recounting of the measure of debt in both these companies. There is seldom a day goes by we don't read of some South American terrorist disaster regarding Occidental. Unocal is heavy into Indonesia, not a very stable place to put our money into. Occidental looks to be in some sort of major "powerful family influence" sphere. Armand Hammer is documented history and Al Gore's dad and he were thick as thieves AND Occidental got the East Hill plumb in central California. ("Political shenanigans"?? How would we know?) I don't feel comfortable with conspiracy theories, and that sort of thing...but I have been around long enough to know little guys like us are the last to know what the big guys know. That said I am also fascinated with the fact that legendary "Oracle of Omaha" Buffett bought USG as a valueplay and it now appears it was a disastrous investment in stock, perhaps not in their bonds. So even he can be wrong. Duh! On the face of it all of Suncor, Alberta Energy and Anderson Exploration ALL look like terrific longterm plays. But in the marrow of my old bones I feel like Slider may be right, that there IS NO place in this industry to just put money in and forget about it. Probably no place in the whole market at these levels for that strategy to work. I watch my two remaining golds like a chicken with her one egg, Franco-Nevada and Goldcorp. I.e., I have become paranoid. It just may be that the concept of buy and hold may be dead for a decade. Good luck with your decision about Unocal. Jim Black