Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Big Dog who wrote (7515)	1/10/1998 10:20:00 PM
From: The Perfect Hedge	Respond to of 95453

BIG DOG: Nice touch! GD

To: Big Dog who wrote (7515)	1/10/1998 10:23:00 PM
From: A. Fineigler	Respond to of 95453

Bravo Mike ! I've been trying to summarize in my mind the situation as described by a concensus of somewhat- to very- knowledgeable people in this industry, including yourself. The essential elements, in order of importance, seem to be 1. These companies are making a lot of money and most have contracts locked in for the next year or so. 2. Based on available information, they will continue making a ton of money for the foreseeable future, with no obvious end in sight over the next few years. 100. Something bad and unexpected might happen to change the picture. To hell with timing the market. These co.'s are solid buys now. Momentum players play a different game, of course. AF

To: Big Dog who wrote (7515)	1/10/1998 11:04:00 PM
From: sand wedge	Respond to of 95453

Dang Mike, that post came very close to some of your ramblings in the old days...... you aint seen Jack have you??? (J/K) I don't think theres much counterpoint. You, as always, take the logical path. One parallel for you sports fans out there. The practice or gimmick Mike mentioned used by the stock brokers is the same exact one that sports tote services use. ie they give 50% of their customers Green Bay and 50% San Fran. Its a great scam, it's worked for 50 yrs and will work for 50 more.... why? I think PT Barnum had the answer

To: Big Dog who wrote (7515)	1/10/1998 11:31:00 PM
From: Broken_Clock	Read Replies (1) \| Respond to of 95453

Mike, Don't know if you followed up on the likks I posted earlier, but I'd appreciate your comments. 207.183.153.88 I can't see how this current low oil can be anything but a bump in the road. Dave

To: Big Dog who wrote (7515)	1/11/1998 2:27:00 AM
From: Roger Perry	Read Replies (1) \| Respond to of 95453

Mike, Excellent post. I wholeheartedly agree with your viewpoint. The Drillers have great fundamentals and for long term (>1 years) investors, you will be rewarded in all probability. May I point out one diminutive thing? There is a difference in how you approach things depending if you are a trader or an investor. When you start to mix up the time frame is when trouble begins. If you have limited capital, you are constrained to an extent on then number of shares you can hold while maintaining a reserve to protect yourself against a margin call. Traders are less concerned about fundamentals and pay much closer attention to the current trading behavior of a stock as well as the prevailing market psychology. While an investor would be grinning now and accumulating the Drillers at these prices as many funds likely are, traders are shorting them. Any rally is stopped cold due in part to momentum traders bailing and traders shorting. Right, wrong...good, bad? I have no idea. However, if you are a trader, you take what is given. If not, you won't be a trader for long! Myself, I have a proclivity for trading. I have never been a believer in buy and hold. I think Dell is a great stock yet as Dell rose some 70 points, my gain was much more - some 90 points. This is because I traded it. I bailed when it dipped and bought back when it bottomed. This is true for FGII, EVI and a few other Drillers. FGII I admit is one that I have not capitulated on and have been buying as it has fallen. As many traders do, I only "trade" with a portion of my capital while the rest is socked away for the long haul. When I get to the point where I feel the need to liquidate my long term holdings, it often signals the bottom of a pullback. On occasion I visit threads to try to ascertain the sentiment level. This is a particularly good group and I have both learned much from the postings as well as come to respect several people who post. I will bow out now, but let me say thanks to all of you for your insightful and intelligent work. I truly hope that this correction is short lived and you are rewarded. Roger Perry The Right Line Split Report editor@rightline.net

To: Big Dog who wrote (7515)	1/11/1998 10:14:00 PM
From: Tulvio Durand	Respond to of 95453

A classic post, Mike. Thanks. An ant on that log I am, Tulvio

To: Big Dog who wrote (7515)	1/12/1998 2:27:00 AM
From: waverider	Respond to of 95453

Mike, your essay was brilliant. I'll try to make a CDG contribution: I've only posted here once or twice, but I just left a private server group (with some very rude egos) and felt I needed company... I decided to call Cliff's Drilling Friday afternoon. I knew they were bored and that NO one had called them about their business lately :) I talked to Cindy Taylor, Controller. Nice lady. Texan drawl and all. First the revenue/operation stuff... -40% of their operating rigs pump natural gas. These are primarily in the Gulf. -60% pump oil. -15-20% of their revenue comes from turnkey operations (fixed contracts to drill a particular well). -80% of their revenue comes from dayrate contracts. Now the current earning situation... -there are continued increases in dayrates for rig leases as we speak (write). -their customers have made their budget plans based on $17-$18 a barrel. -if there is a continued downdraft in the price of oil, we're talking 6-12 months, then some of the smaller oil companies may have to cut back on exploration. -the "lion's share" of Cliff's contracts are with larger corporations. -FWIW, recent estimates are that oil will average $18-$19 a barrel in 1998. -the company is very comfortable with current quarter earning's estimates (since the quarter ended in December, they have a good idea what is going on). -they are also comfortable with analysts 1998 earnings estimates and have planned their budget according to similar projections. The only question is the price of oil and how long this current fall will last. No analysts downgrades to speak of except for the major oils. From all I can see, 1998 should be a stellar year because most of the contracts are locked in through that period and day rates continue to increase. I don't get it. Oil is a commodity, but this current situation seems very different to me from the semiconductor nightmare a couple years ago. There were downgrades all over the place and excess capacity. Rigs supply is VERY tight and will not improve for at least 1-2 years. So here I sit, drinking my Gulf Oil cocktails by the gallon, driving everywhere I can go, keeping the home hot with natural gas and cooking huge, gas burning (not producing) dinners. If the current situation continues, I'll be loosing more per day than the Justice Department threatened Microsoft in fines. That said...no predictions here, but man oh man what a nightmare we've been through. Diamond H