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

To: Paul Senior who wrote (106633)	8/6/2008 1:37:56 AM
From: Q8	Read Replies (2) \| Respond to of 206198

Paul.. this may explain some of it: Are you in the West Coast.. posting at this time?! August 6, 2008 Commodities' Drop Hurts Stocks That Came Late to the Party By GREGORY ZUCKERMAN August 6, 2008; Page C1 Commodity prices are cracking. But some investors in related stocks are really gnashing their teeth, especially those late to the commodities party. Since July 30, oil futures have fallen 6%, but Exxon Mobil is down 7.1%, Baker Hughes is off 7.7%, and Occidental Petroleum has fallen 6.3%, among large energy shares that are underperforming. To really rub it in -- these shares largely limped along during oil's huge climb. Some of these stocks are down this year, even as oil is still up almost 25%. Wayne Cooperman, the son of legendary investor Leon Cooperman and a long-term fan of commodity-related shares, scored gains of 8% this year through June at his $2 billion hedge-fund firm Cobalt Management, even as the Standard & Poor's 500-stock index tumbled about 12%. But declines in many of his favorite stocks, such as Occidental, Walter Industries and Cabot Oil & Gas, have eaten into his gains in the past few days. "Concerns about a global slowdown have picked up, people are definitely getting more nervous," says Mr. Cooperman, who avoided severe losses by hedging his bets with energy futures that paid off as prices fell. He says he's still bullish. "Most energy stocks are dirt cheap at $120 a barrel oil...you can make the same case for coal, and steel." Meanwhile, higher-flying commodity stocks are beginning to crumble, burning a different group of investors: hedge funds and others that jumped on the commodity bandwagon more recently. Shares of fertilizer companies Potash Corp. of Saskatchewan and Mosaic are down 18.8% and 16.6%, respectively, in the past four days, while mining companies Joy Global and Bucyrus International are down 14.5% and 23.2%, respectively. In comparison, the broad Dow Jones AIG Commodity Index, a futures index, is down 5.1% in that period. Behind the sharp moves are fears that more investors could exit if energy falls still further. Others are taking profits from commodities stocks in a still-nervous market. Another explanation: Stocks derive their value from the long-term fundamentals of a company, while energy futures generally are shorter-term trades, so if investors become more worried about long-term energy prices they're apt to sell shares before energy futures. But despite the shift, some maintain energy profits will keep gushing. "A lot of money is clearly leaving the energy space, even though there's been only a modest drop in oil prices after a huge run-up," says Evan Claar, who runs CBI Capital. The $50 million New York hedge-fund firm has also taken hits on smaller natural-resource companies in recent days, though the fund is in the black this year. Mr. Claar estimates that new oil production is profitable for companies as long as oil prices stay above $50, so he's buying oil-service companies amid the selloff. "Even $70 a barrel is a great price," he says. Indeed, most energy companies use internal projections that expect oil to be well below $120 a barrel, according to investors focused on the business. "Earnings continue to be spectacular."

To: Paul Senior who wrote (106633)	8/6/2008 5:14:36 AM
From: Bearcatbob	Read Replies (1) \| Respond to of 206198

"My opinion is that it's people - individuals as well as fund managers - who are just being scared out of oil/gas positions as we see media reports that oil might drop further, maybe to $110 or $100 or $80, implying oil stocks dropping further too." I have a very vivid memory of the late '70s when the oil bubble burst and fortunes were lost. I suspect others were around then as well. With all the media and political noise about the problem simply being speculation it is no wonder some would be scared.