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: Gator II who wrote (20408)	4/26/1998 1:17:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 95453

Gator, I think the market looks significantly beyond six months to a year out. I believe that the market's discounting horizon is as long as it has any view. As evidence, let me point out the dd's about a year ago. They were trading at a significant discount to the overall market, and virtually every analyst was banging th table about how great they were. Most were assumed to have growth prospects well in excess of 25% per annum, yet they were trading at about 10 - 15x earnings. The truth is that virtually all serious investors in that group knew that the sector has had a long history of overcapacity. So, while analysts were screaming "Buy! Buy!", investors were taking a much more level-headed approach. The same thing may be operative in this segment. Historically there has been significant over-supply of rigs. We are being reassured constantly that this time it's different. With the downturn in oil prices and consequent reduction in some e&p budgets the potential crisis is brought closer. Clearly, the onus is on the drillers to show restraint in building. If they do, all will be well. If not just look at what happened to companies like WDC and SEG. TTFN, CTC