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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: quehubo who wrote (17428)	1/25/2003 11:37:47 AM
From: russwinter	Respond to of 206199

In the very short run I think E&Ps continue to outperform, especially as they knock the covers off the ball with 4th qt results. Also as the brokers keep upping their 2003 NG price levels they are forced to also update their earnings and cash flow estimates. This is very much a "whites of their eyes" market, and that process should happen quickly now. Also IMO some buyouts will being forthcoming in E&P that might positively shock people. However I agree that ultimately the leverage will be better in the drillers, and I don't wish to get too cute and miss that, so I've been committing my reserve funds to that arena in the last couple weeks. I'm probably now about 50/50 split (was 90/10 when I started buying in Nov.)between E&P and driller/oil service, and will keep it that way. I definitely feel 2003 will be an active exploration year (75% likelihood), maybe in time on the scale of 2001 (40% likelihood). Offshore drillers are now only selling at 120% of NAV, and 50%, or even 100% higher prices is quite justifiable as this gradually becomes apparent. Downside might be to 100% NAV, but this would take $20/$3, an event that won't happen (I don't subscribe to the TOHOE manna from heaven premise) unless we see a worldwide economic collapse (maybe a 10% likelihood for severe one now, 15% for a serious one). But the collapse in part may be sparked by a large energy spike first.