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

To: Bernie Diamond who wrote (24178)	6/15/1998 7:48:00 PM
From: Grommit	Respond to of 95453

You may be right about OPEC making a huge cut Bernie. I suspect that you are but that it will make not make the impact that it should. We trust OPEC less than they trust each other at this point. "Show me the cuts", will be the reaction. A few ramblings myself... This is good news. Activity continued strong in the North Sea, West Africa and Southeast Asia. I still wonder what makes the Gulf (and US land drillers) so much weaker than the rest of the world. I asked a week or so ago. I appreciate the answers but I think they were lacking. The best answer was that it is more expensive to drill in the gulf. I do not understand why, so I am still mentally stuck. Is this weakness going to spread world wide? Why or why not? .... Oil prices, up or down? Down - because OPEC cannot get their act together and are desperate for cash. Demand is down in asia and US stockpiles are up. Even if OPEC gets it together, no one will believe them so the price will stay low for a month or so until their evidence is in of their reduction. Up - because it makes no sense for OPEC not to cut production by 2 or 3 MMbd (8-10%) and increase oil price by 60%. It is an amazingly small balance point of supply & demand that they are on, and a relatively small correction will have enormous effect. They are not idiots and the heat on the oil ministers from the kings, gods and sultans is more than we could imagine. ...... Stocks, up or down? Down - all the bad news is not out yet. Estimates are too high, rig stacking press releases are not out, warnings of Q3 have not been uttered. Oil Prices are not going anywhere for a month (see above). Up - there is no reason for these stocks to go up. Sorry, I cannot argue the "up" side of this one. Fundamentals are lowering and to buy them now you would have to be nuts. All the news is not out. If you did not own them already, would you buy? Heck no! I think you wait until they get cheaper, and if you miss the absolute bottom, no big deal. You wait for oil prices to go up. That's what the smart money is doing. Maybe a super smart guy will pick the bottom. Not me; not us. .......... I am not smart enough to give advice either, so do not listen to me. But here goes. This is real basic advice. Sell half now. (This might be real dumb advice.) You can always buy them back. When you do, the trend will now be with you, oil prices will be up, less uncertainty and you will sleep better. (These are uncertain times -- best to lower your risk with the downside of lower potential gains.) But do not buy them back too soon - ignore the head fakes and wait for oil prices and wait for Q2 conf calls. If you are greedy or real smart, ignore the above. (The converse is probably also true. If sitting on cash and itching to buy in now, "at the bottom", buy half (or less)). as much as you hate this guy, this is good advice Message 4851601 good luck, excuse the advice and stay out of dark alleys. grommit