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To: GVTucker who wrote (182614)	11/9/2005 5:29:12 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 186894

What was so shocking at XOM's last report? here's what was really shocking about it, to me. Revenue rose 32 percent to more than $100 billion. A 32% revenue rise from the 70 billion range to 100 billion in revenues. First of all, the law of large numbers usually curtails revenue increases of 30 billion in 3 mos, over one year. Secondly, oil and gas is not exactly an emerging industry where the world is just converting to home heating and horseless carriages- this is a mature industry so growth like this smells like gauging. Now I know , some will say china is in that "turn of the century" growth mode and therefore, oil and gas IS a growth industry. But, not really- if you look at the path of unit growth for the worlds oil consumption it is way below the profit growth, even WITH china.

To: GVTucker who wrote (182614)	11/9/2005 5:56:03 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 186894

Re: Their profit margin of 12% or so is rather pedestrian. A commodity SHOULD have a low margin, and 12% is not exactly low.

To: GVTucker who wrote (182614)	11/23/2005 10:20:50 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 186894

As it is, over a full cycle returns in the oil and gas business are much lower than most other industries. that is the conventional thinking, and the reason why people who have underweighted energy have underperformed the last few years. after all, you'd have to be insane not to invest in a sector that's trading at a huge market discount even as it has the best fundamentals...unless you thought it was all unsustainable. the assumption is that everything is business as usual (i.e., huge cyclical downturn in process). it's the only way to explain the chronic underpricing of the energy stocks. but there's little reason to think that this assumption is valid. prior price spikes were brought on by supply shocks. the high prices preceding the hurricanes had nothing to do with supply shocks. it is just there is not enough margin between supply and demand, so a small shock causes big price moves. if global supply is indeed peaking then the old cyclical rules do not apply. just look at OPEC--as recently as last summer they contended that $28 was their long-term upper limit. people were expecting a huge wave of oil to lower prices and get Shrub reelected. didn't happen. nobody's in control anymore.