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

To: jbe who wrote (22628)	5/21/1998 2:49:00 PM
From: JHR	Respond to of 95453

Befuddled It looks like the sector is strictly driven by oil prices, or at least it cant overcome low prices. We've heard the littany of reasons why these stocks should do well anyways with long term contracts, re[acement of depleted reserves etc. but lets face it nobody seems to believ it except us. One other point, I follow an investment advisor that is pretty much of a momentum player with different sectors. His basic approach is " I cant tell which individual stocks will go up, but with various momentum and technical models I can pick the sector thats ready to move". He was in FSESX last year from May until October or November and got out. He just got back in 3 weeks ago and sold out this morning basically citing the inability of the sector to follow the market yesterday in anotherwise strong day. This guy has had a good record the past 6 years, but he's only up about 3% this year. I'm still sitting here long watching my profits flush just like last fall.

To: jbe who wrote (22628)	5/21/1998 3:10:00 PM
From: Czechsinthemail	Read Replies (1) \| Respond to of 95453

Big oil has a big advantage in that these companies have refining and marketing operations that can profit enormously off the margins of low crude and relatively high gasoline prices. Check out the Noesis report on West Coast gasoline: oil-gasoline.com There is some tendency for index funds to outperform because of the major cash flows into these stocks even while others are being sold. This has generally favored large cap companies over small and mid cap. There is a lot of discussion about the two-tier market and whether the large cap companies have become so fundamentally overvalued that they now carry much higher risk relative to their appreciation potential. Paul Chambers, the oil analyst for Lehman, has made the point that oil service companies have been bid up relative to drillers so may carry more downside risk and less upside potential. My thought is that if many land rigs are being stacked, that portion of their business related to land drilling may be vulnerable. Your point on the tax considerations is well taken. For most, buying these companies when they are down and hurting and then holding for a long time is likely to work well, but trading is likely to take you out of the market when it makes a move and then doesn't go back down. Eventually it will. Baird

To: jbe who wrote (22628)	5/21/1998 4:02:00 PM
From: waverider	Read Replies (3) \| Respond to of 95453

jbe, an excellent analysis...and EXACTLY my experience...give or take a few numbers. I've asked myself the same questions. The only reason I play with this individual stock stuff is because I find it rather educational...and sometimes fun when I win. However, if I were to consider it my job and calculate the number of hours I spend reading SI, researching, and keeping track of any trading over the year and consider the money I have made...a prudent man would say I should find another job and give my money over to the Heartland Value Fund. That said...long term investing shouldn't take a lot of time IF you do the right research in the first place. Now that is the big question isn't it? I believe in this sector, as so eloquently stated by Big Dog, so I remain a long term investor and will leave well enough alone to hopefully watch my profits increase over the next few years. One does need to keep an eye on things, however...and that takes time. How much is your time worth? Is it better spent elsewhere? At times like these one seriously questions one's talents and abilities...and can develop painful ulcers. I often admire my two kids as they play outside with nothing more to worry about than when to eat dinner. It only takes a phone call to one's broker or a click of the mouse to relieve the pressure this financial game places on you. Think about that... As for me, I'll soon be writing for a living and found that my option and margin levels were preventing me from thinking straight...so I cash 'em in a couple weeks ago. Do what let's you play and sleep in peace. <H>

To: jbe who wrote (22628)	5/21/1998 5:57:00 PM
From: MonsieurGonzo	Read Replies (1) \| Respond to of 95453

jbe; RE:" Equities -vs- Indices " I will add my kudos to others regarding your thoughtful post, jbe. In general, I have found that trading the sector indices has increased my skills and awareness a great deal. Just looking up the components of the OSX.X and SOX.X and DRG.X - tracking these equity issues along with the indices themselves - has been enlightening, to say the least. As a direct result, I now prefer the diversification of buying and selling indices, and only trade individual equity components when I sense an opportunity to grab some underlying equity option before it crosses an "options boundary". CL98N and CL98Z - crude oil futures are a driving force for the XOI.X / OIX.X in general, and the OSX.X in particular - the OSX.X being more volatile. I cannot imagine "investing", ie., "buy-and-hold-forever" any oil or oil service stock. But the OSX.X is great for "trading". Yes, indeed - the capital gains taxes are a consideration - but then there are better ways to sit on your portfolio than trading OSX.X options, which is fast, fun and frustrating all at the same time ! My favourite do-it-yourself portfolio consists of 100s each of DIA DJIA DIAMONDS, SPY S&P-500 SPDRs, and 100s of each of the 17 international WEBS (Check out the WEBS on amex.com ). Today, this consists of a $50,000. portfolio, $20,000. of which are the (US bellwethers) DJIA-30 and S&P-500 indices themselves, the rest are primarily in Europe. This portfolio is up about 20% this year, is not likely to tank, pays dividends (from each country) on the underlying, diversified mix of stocks, and will beat 80% of the professional MM's this year. The EU is especially hot right now, and I like being diversified all over the world - with a 40% US weighting - and instant liquidity. Just putting DIA, SPY, and the 17 WEBS into an online portfolio thingy - like MyYahoo! - and tracking it, is a useful endeavour for any stock trader. Anyhoo, good luck to all y'all oily-people. ( I bought more OSX 110 CALLs when the index hit 107 flat just before close today ;-) -Steve

To: jbe who wrote (22628)	5/21/1998 11:21:00 PM
From: Slava Chechik	Read Replies (1) \| Respond to of 95453

JBE, Yes, you could do better with mutual funds. You can buy RYDEX NOVA to get 1.5 times SP500 return and RYDEX URSA which sells SP short. So you can try time the market if you want to. Also they have index funds to mach a few sectors including OSX, NASDAQ 100, and bonds. Potomac funds are similar. People who run them left Rydex. Remember, SP500 index regularly beats more then 80% managed funds. Probably you'll spend less time and resources and make more money. But some people bought DEll in 1992... Or you can buy a few shares of Berkshire Hathaway (BRK.A if you are rich and BRK.B if you like a rest of us) and bet on Warren Buffet skills to make money for you. Everything is OK if you can slip at night and not think about your investments. Regards, Slava Chechik