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Gold/Mining/Energy : VLO: Valero Energy Corp. -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (89)	10/7/2006 12:35:30 PM
From: KyrosL	Read Replies (1) \| Respond to of 299

It's because refining has a bad reputation. For many years before the last few, refining was a thankless business of cut throat competition and low margins. People are naturally afraid that this time is not different, and bad times will return in the not too distant future.

To: carranza2 who wrote (89)	10/8/2006 2:10:32 PM
From: Wyätt Gwyön	Respond to of 299

having a very difficult time explaining to myself why c2, all i can say is that it's been that way the entire time i have been following VLO, from the lows of $6 in 2002. i was asking the same thing at $12, and $20, and so on. on the one hand it is frustrating, but otoh, this is a great example of market inefficiency, without which an investor has no chance of obtaining superior returns. i still believe that energy will eventually be embraced by WS, and will likely trade at a market multiple if not a premium. that is exactly what happened to tech as tech stocks were regarded as cyclicals deserving single-digit PEs in the 70s. now people ignore the cyclicality of tech and the lack of persistence of high margins in most cases, and so tech is given ridiculous valuations. but that's a long process and at the end of it energy will no longer be as good an investment. in the meantime, i like the prospects.