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

To: profile_14 who wrote (84414)	5/12/2007 8:32:38 AM
From: Tommy Moore	Respond to of 206191

Thanks for the reply. It indeed has been a good run, I've had a twitching finger over the sell button for the last couple of weeks and yet the energy side keeps moving up. Last year was two steps forward one back culminating in the Trust debacle in October, am determined to keep my gains intact this year.

To: profile_14 who wrote (84414)	5/12/2007 10:10:20 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 206191

. Relative to refiners, the crack spreads are cyclical. All one has to do is graph them and realize that they can be easily cut by two-thirds and still be healthy agreed. But at that level, they do not generate the margins that are causing these equity prices. there i don't agree. today's margins are not "causing" today's equity prices, at least in VLO's case. if VLO were priced based on current margins, it would be a $250 stock. at current margins it probably has a run-rate PE of less than 3. in other words, NOBODY believes margins will stay at these levels. in fact, your idea of selling ahead of the margin decline is the single greatest consensus position out there. even that dingbat Cramer says sell VLO based on exactly the same logic you expressed. i still have shares of VLO i bought at split-adjusted 6 around 2002. the ENTIRE time, VLO has been a single-PE stock. always, analysts underestimate the earnings. yet somehow the stock is up 12x from those levels. admittedly, it is very hard to hold the stock in the face of all the mass media conformist pessimism, in the face of the "knowledge" that spreads will decline and decline hard, and the "obviousness" that the stock will get whacked when it happens. i have a relatively small position and would in fact welcome a pullback. but i find it equally hard to be out completely, knowing that the stock is very cheap even at much lower margins.

To: profile_14 who wrote (84414)	5/12/2007 10:25:22 AM
From: ChanceIs	Read Replies (1) \| Respond to of 206191

>>>refining companies in the past even lost money some years.<<< It is interesting to own a business which morphs one form of energy into another. They all suffer the potential to have someone set up next door. Refineries are already regulated from an environmental viewpoint - not sure that is a bad thing. They are also very regulated about their product output...E85, summer formula, winter formula, etc. I don't think it would be a great leap to see them become regulated utilities if we keep going down this path. That of course would not help prices or supply. Airlines were free and then became regulated. Same with electric utilities. I am not sure about water and telephony. I think that the refineries should be viewed with great caution here. The California electric crisis example of the ex-post facto setting of prices by the government seems to be always in front of me. Just last week, Calpine petitioned the US Supreme Court to hear its case to revoke 9th Circuit's command to FERC to review the prices of contracts signed back in '01....to see if they were "fair and reasonable"...or ...."in the public good." (Fair and reasonable....does that sound a little like price gouging??? Very easy to define. What did one Justice say: 'I can't define pornography, but I know it when i see it.') So is there some scrap of legislation that the anti Big Oil crowd might drag out and say - 'these transaction need to be reviewed.' I saw it happen. It is still happening. It was very financially painful to be on the wrong side. Look at the government with the GOM royalty leases. No royalty language was in the leases....but it should have been. So you oil companies owe us about $1 billion. And if you don't pay it, we will break your thumbs and ban you from future business in the GOM. So will it be thus with refiners??? El Paso paid $1.4 billion to settle a market manipulation (withholding pipe capacity) case for NG into California. So the refineries deliberately withheld capacity. There is something somewhere with which the government can start to tear the flesh from the refiners....and make them cough up a few gigabuck political trophy. Quite a long rant here. I guess I have seen Wall Street break and run many times when the government draws a bead on a business. The hair on the back of my neck is twitching when it comes tot he refiners. Assets in the ground or machinery which morphs assets from one form to another. Its relatively easy to build competing machinery. Its harder to build new assets in the ground. I like the smaller E&Ps. Drillers don't morph energy. I can't imagine Hillary accusing Cloyce Talbot of deliberately withholding a rig. You can move them around a lot faster than a refinery, and unlike the latter, when folded down are below the radar.

To: profile_14 who wrote (84414)	5/12/2007 1:43:09 PM
From: CommanderCricket	Read Replies (1) \| Respond to of 206191

profile, The problem this time around (hate to say it's different) is we have to compete for resoures from others that have much stronger currencies. It all looks bubbly from a $USD/North American stand point but from Europe or wherever, the US stock market has sucked and hasn't gone anywhere for awhile. Plot the major averages against the $USD. Not very exciting... So when Total, Lukoil or ENI want to purchase oil reserves, refinery assets, etc...it's still cheap. Who's building a major position in the GOM? It's Brazil, not XOM Not selling any more shares and looking to accumulate again this summer. Crunch time is coming soon Good luck CC