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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Alias Shrugged who wrote (5127)	12/14/1997 6:53:00 PM
From: Broken_Clock	Read Replies (1) \| Respond to of 95453

Mike...Please explain how that will work... <<...demand not only stops growing but actually decreases in SE Asia due to lower economic activity and the negative impact of currency.>> It seems that everything I read says the opposite. Devalued currencies equate to lower production costs therefore competitive advantages over countries where currencies haven't devalued. This increases the countries'(devalued currency countries) economic activity because of pricing advantage. Therefore the fallout in the tech sector, which has to lower costs to compete with products from Asia as well as lower prices to sell products in Asia, etc. How does this impact drillers(except as a side effect from overall market turmoil)? Sidelight on Canadian Stocks: Canadian dollar getting weaker against US dollar...therefore canadian profits erode simply on exchange rate when converted back to US dollars upon sale.

To: Alias Shrugged who wrote (5127)	12/15/1997 2:25:00 AM
From: Czechsinthemail	Read Replies (3) \| Respond to of 95453

Mike, I think the best explanation for the bad times in this sector recently is nervous profit-taking accelerated by fears that drilling will be cut back due to a combination of OPEC overproduction and Asian underconsumption. Selling has accelerated as oil prices have dropped. Unless oil prices continue to drop to significantly lower levels, the expected link between falling oil prices and cutbacks in oil drilling budgets will not pan out. Virtually all indications are that drilling activity remains strong. The capacity problems in the industry weigh in against producers casually stepping aside from drilling projects they will not be able to get rigs for later. So long as oil prices don't completely collapse, the intermediate and long term picture is favorable to continued drilling and responds to the need to increase reserves. Analysts have noted the seasonal tendency for the industry to weaken around this time of year. Of course the other tendency is for strong price action during the weeks leading into earnings reports. The relative earnings strength of the drilling and oilfield services compared to financial services stocks is inversely related to their relative price weakness. This should reverse fairly soon. Though the group is likely to move up, I think the best bets will be among the deep drillers expected to report strong sequential earnings growth this quarter--NE, RIG, RB/FLC and SDC. Among these, I like NE and SDC best. I've sold other drillers and service companies to concentrate on these. Keep the faith and keep your shares. Baird