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

To: Broken_Clock who wrote (5129)	12/14/1997 7:46:00 PM
From: Alias Shrugged	Read Replies (1) \| Respond to of 95453

dlucas - Currency impact is straight forward. if their currency has devalued by 1/2, gasoline is now twice as expensive. How much has the S. Korean won devalued - 60%? 70%? Gasoline is now three times as expensive. I agree that the export-oriented portions of their economies will increase (or at least be more competitive), but all other apsects of their economies will slow due to layoffs, tight credit, bankrupcies, and overall loss of wealth. lots of those new office buildings which would have sucked energy are now standing empty. Construction of infrastructure is energy intensive - this will be cut back. Hey, I'm just trying to understand why the street has slammed our stocks, and what has to happen in order for them to view these stocks as being safe to re-enter (other than a further 20% - 30% decline). I'm hearing "over-capacity" as being a problem - too many chip plants, too many folks building cars, China manufacturing more crap than they can consume. Part of the "Driller" story is the shortage of deep water rigs. What if the Street views the current 50 rigs under construction as part of the same potential over-capacity problem? By the way, I called Varco (VRC) investor relations on friday. Their business is going great (they build the equipement which is used on drilling rigs, especially rigs being outfitted for deep drilling). They are virtually booked for all of 1998 and are now working on 1999 orders. Most of these orders are for new rigs, as opposed to the conversion of existing hulls to drillships or the upgrade/refurbishment of existing rigs to drill in deeper water. If Wall Street believes that oil demand is leveling off or decreasing, with a resulting decrease in price of oil, this has severe negative implications for this stock (which I first bought in 1993 at a split-adjusted price of $2.25). Anyway, would love to hear further thoughts you have. Mike