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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (41258)	9/10/2005 11:02:21 PM
From: skinowski	Read Replies (1) \| Respond to of 110194

beginning to look like the hurricane has created an intermediate term top in the energy complex I know everyone knows it, but I'd like to say it anyway: Heinz is a smart guy. Interesting analysis. It's probably time to watch out for some down side in that sector.

To: ild who wrote (41258)	9/11/2005 9:58:37 AM
From: Wyätt Gwyön	Read Replies (4) \| Respond to of 110194

hurricane has created an intermediate term top in the energy complex. perhaps. but it seems to me there's been some separation in the energy patch. maybe that is a new phase in the market. oil sands such as COS are near all time highs, at least in USD terms. and obviously the refiners such as VLO (my second-largest holding) have gone gangbusters. as FT recently pointed out, VLO appreciated more than GOOG over the past year. but, as Babe Ruth might have said, VLO had a better year than GOOG (and still trades at a single-digit PE!). i think VLO can make $22 next year. so if the stock is at 110, that means it has a forward PE of 5 based on my assumption (which i do not consider too ridiculous). of course, people think GOOG will make $7 so they have a target of $500. but if an energy stock makes $22 it is a "bubble", and the stock should go to zero. i love this market, it would not be possible to outperform it if there were not so many tech-loving idiots and energy-hating fools. Wall Street, thank you, thank you. in my past experience with stocks that had big runups in the tech sector, part of the appreciation came from big earnings increases, and part came from valuation multiple increases. so far i have not seen that in the energy sector, as it trades at a discount to the market. will this always be the case? while it might be irrelevant to Heinz' intermediate figures (which seem solely based on sentiment in the form of XLE put/call ratio, which is just a large-cap delta-hedging vehicle and says nothing at all about fundamental prospects or valuation, especially of subsectors such as refiners and oil sands), i still believe in the long run that the energy sector will handily outstrip tech on a market weighting basis and should gain in PE as well. a 5 PE is not very high, imo. of course, the same analcysts that told you to sell VLO last year (at split-adjusted 25) would probably tell you the same today. from the memory hole of a year ago: "To: russwinter who wrote (18509) 9/11/2004 9:48:15 PM From: Darffot of 41305 The firm is maintaining "underweight" ratings on Frontier Oil (nyse: FTO - news - people ), with a target price of $17; Sunoco (nyse: SUN - news - people ), with a target price of $52; and Valero Energy (nyse: VLO - news - people ), with a target price of $55 [split-adjusted $26.50]. LOL. i have owned VLO since 25 [12.50 split-adjusted]. it trades at a whopping PE of 8, on trailing earnings. those geniuses probably have a super-duper buy on some internet stock with a PE of 100." Message 20513930