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

To: Art Bechhoefer who wrote (15157)	7/5/2002 2:48:54 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 36161

Art re: ["Slider, you're correct that I was looking for continued strong oil and gas prices over the last couple of years. In fact, they've remained quite strong."] Art re: "remained quite strong" - if you were playing the physical commodities markets in Oil & Gas... then you were right to an extent - as both Oil & Gas prices are relatively strong; but still down significantly from their prior highs. But, if you were playing the Oil & Gas "STOCKS" (and I think you were) - then being somewhat "right" about the underlying commodity, but "wrong" about the stocks shareprice reaction to it - is a moot point .....as the oilpatch has been dead money since June 2001; with the OSX, XNG and XOI "all" substantially lower. The OSX peaked in Aug/Sept 2000 (nearly 2 years ago) with the "New Pardigm" Nat Gas Bubble blowing off in Dec 20000 and the less volatile XOI in May 2001. Energy has basically been dead/negative money for sometime now... There was and still is, a significant "Risk Premium" now assigned to the price of Crude Oil that unfortunately didn't flow through to the broad spectrum of Oilpatch stocks; primarially because of the weak Global Economy and negative overall market environment...and it is that weak Global Economy that is and will remain for sometime - a cap on the Oilpatch "stocks" getting any significant momenteum here. I think we will see a "double dip" recession - if that's what you want to call it....actually it's really a matter of which numbers you wish to use, or ignore... unemployment and Cap Ex spending have not turned...nor are they likely to anytime soon imho. With today's Labor Depts revisions to prior months unemployment numbers; we now have DOUBLE the amount of people who have been out of work for 11 weeks, or longer than we did a year ago and unemployment looks to be going to 7% imho... these continual negative "revisions" by the way (that never seem to make the headlines)...should give an EBITDA/ProForma-esque taint to most of the Govm't CPI, or Unemployment data fwiw . The OSX is trading about where it should be imho... and that is a trading range of about 72 to 92. Sub OSX 68-72 - one can begin to average in for the next cycle... over OSX 92-98ish imho; you need to take profits in this present economic environment. I think the Energy stocks will give us a nice buying opp off of any one of the many - "when, not if" - "event driven" negative market catalysts that are out there. There are some intriguing plays out there - EP interests me, I've toe-dipped in & out of WMB; allthough I think Buffet has the correct way to play WMB - via the bonds...if XOM hit the low $30's - I'd be all over it etc. Nat Gas obviously has a bright longterm future...and the cyclicality of the Oilpatch will continually offer great trading potential. But, overall with Energy - it's really been a question of whether better risk vs reward returns are available elsewhere (ie: our jump from Black to Yellow Gold) - or whether we'll be able to ultimately buy them not just cheaper; but MUCH cheaper as the Bear Market grinds ever lower. I think I was correct that better risk to reward opportunites were available outside of energy - re: the Gold/Silver run of late and I think I will continue to be correct... that concerning Energy and especially tech; that they'll be available much cheaper... if one can exercise patience and sit patiently in hoardes of Cash. ...we shall see ~