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

To: Gene J. Abel who wrote (6140)	12/25/1997 8:41:00 AM
From: bobgh	Read Replies (1) \| Respond to of 95453

ALL:........MERRY XMAS..... I found this on "Yahoo", sounds good to me!!!!!! ---------------------------------------------------- Subj: Drillers in 98 By: TomSJ Date: Dec 24 1997 11:22 P.M PST Reply To: Msg. 110 by jameslim I agree with your post,as I stated earlier this sell off is basically market driven.When I said forget fundamentals I didn't mean they weren't important or no longer existed in this sector.That really is the point,because the fundamentals are very strong and will continue that way till a least year 2000 for most of these drillers. Day rates are locked in for most of the operating rigs,and even if day rates are slighly lower for some new contracts like SLB,they are still projecting 20-25% earnings in this sector for 98 Given revised earnings estimates of single digits for the DOW Components and many in the tech sector where would you rather park your money in 98. So why the sell OFF? Is it market driven,or fear of deflation.Well certainly there is a lot of fear about deflation but the market plays on fear to its advantage. Drillers have had a tremendous run up and many felt they had topped out including many fund managers.I read Fidelity Funds owned at least 16% of the sector. Also in IBD mutual fund section they list top funds and there holdings.In the top sells column I noticed many drillers on the list.Add to that market makers manipulation, probably short selling many of these stocks,and you have a huge 5-6 week decline across the board.As far as the small investor selling I think there may have been some tax selling for those of us who got caught in the down draft.I for one did that on UTI and NBR.You can take the right off and buy back after 30 days. As far as lower oil prices hurting this sector I don't think so Lower oil prices means lower gas prices which will increase the demand.Besides many Asians don't use gas they use bikes for transportation.This argument of Asian impact on earnings is good for companys like Applied Materials (AMAT) but remote for the drillers. As far as the Federal Reserve they should abolish it and send Allen to his ranch. There will be table pounding and lots of upgrades in this sector in early 98 as the money starts to pour back in at the right price,This will be despite what is going on in Asia.Where else will you be able to get a good return on your money? --------------------------------------------------------------------- Makes sense to me!! bobgh