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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Doug who wrote (4865)	3/24/1998 4:45:00 PM
From: Kerm Yerman	Read Replies (2) \| Respond to of 24921

Doug / Downside Risk Opinion Opinion is that there still exists downside risk, far outweighing further upside potential. All I think that has been accomplished with the agreement is to set a absolute floor of $14.00/bbl for oil. I think this reasoning will be factored by the market and shares will give back some of yesterdays rally in shares. At that point, shares should pretty well stabilize for approximately a 4 week period. We will then be at a very critical stage for determining further share movement. There will be the progress reports on new quota progress and we will begin to see a flood of first quarter reports - which from an earnings viewpoint, we know will be bad compared to last year. So, at this point we are still in a very cloudy situation for the near term and the weathermen are calling for thunder and lightning. I think the sun just poked thru the clouds for a brief period yesterday. Investors willing to take on the risk, should do so on a gradual basis and plan cost averaging over the coming few months. That's my intention, apply cost averaging and be real selective in my investment choices. Downside for shares in many companies are already in an oversold position. Downside risk with these would be at a minimum. I will also add this, I think there are a few companies whose shares are overvalued also. They are the companies that really stand to lose in a market setback. I'll stick my neck out and mention Renaissance Energy as an example. I no longer will discriminate between whether companies are leveraged towards oil or gas. Those now jumping on the natural gas bandwagon will find they waited too long. However, there will be another opportunity to take advantage of natural gas, but it is not at this time. The window for opportunity will reappear late fall. between now and then, expect shares to stabilize - or even lose a little ground. I myself, will focus on those companies which I feel certain will be increasing production and building reserves at a reasonable cost, regardless of the commodity.