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

To: SliderOnTheBlack who wrote (25510)	7/11/1998 8:54:00 AM
From: P.Prazeres	Read Replies (2) \| Respond to of 95453

Here's a thought: Many on this thread are stating : "when Asian demand ramps up", "cold winter", etc... - what if the asain recession/depression lasts for another 2 to 3 years with the worst yet to come? - what if this winter isn't the super cold La Nina winter? ya see, it doesn't make sense to say that company X is selling at a 99 p/e of 9, because it was selling at that level 1 , 2 and 3 months ago. Earnings estimates have been reduced and prices came down with them. Earlier this year, these stocks snapped back because oil snapped back, with the hope that it would sustain itself at $15 or $16. Now, it has been below that level for months. THAT is the BIG problem here. DO and EVI, etc are selling off for a reason. The reason hasn't been released by the analysts yet, but there is a reason...and their clients are the one who know it. ESV is still projected to make $2.00 this year but if you look at the lowest estimates, they'll probably make ~1.75...and these estimates probably assume a return to 17 oil by this winter...if that doesn't happen, then the company won't even come close to making that in 99, and suddenly the p/e of 8 turns into a p/e of 16 for a stock with an unclear outlook. I hate to bring down everyone so early in the weekend, but this is what these stocks are assuming right now...nothing more and yet nothing less. Paulo

To: SliderOnTheBlack who wrote (25510)	7/11/1998 9:00:00 AM
From: Thean	Read Replies (6) \| Respond to of 95453

A postcard from the sabbatical land about the drillers. Hello everyone, it has been nice to be away. For those newer guys who don't know who I am, well I used to call this home until I decided to pack my bag and leave when the house became too noisy. I have a few words here that some will agree and many will say what-do-you-know. But I'm not interested in agreeing or disagreeing, I'm interested in shedding a bit of the reality wisdom in investing in the drillers which I had always been able to do here, and it is free too! In investment everyone needs to have their own philosophy and system. The biggest truth about the market is it does not care who is right or who is wrong - everyone has one's fair share of right and wrong. The difference is when the pro's make mistakes they can provide eloquent arguments as to what had gone wrong and how they were still right despite; while when the humble moms and pups made a killing they really think they have been lucky. The market also likes styles, and I'm not talking about investment style I'm talking stock price movement style. The force that drives the change of style from time to time is really no difference from the change in cosmetic or clothing style - its about collective taste in one collective segment. It is when one's own system does not jive with the prevailing collective taste that one goes broke from their investment. One of the biggest mistake, and arrogance, in investing is the thinking that one's prior profit and wisdom gained by following a certain investment style will carry over across the board. This is absolutely a nutty thinking! Should one think that a buy-and-hold strategy will work here (I know this has been debated to a distasteful ending sometimes ago)? Sure! Shall one think that an active trading style will work better? Sure too! Confused? No, one should not think so if one just open the window and look outside and see where the sun is shining today. Put it simply, a John Trevolta's polyester pants and dance steps may be out of style today on mainstreet, but it can still find homes in certain specialized dance clubs. What I mean to say is - regardless of one's personal investment style, one can almost always find a place for it. Which brings back to the topic of my discussion - how about these darn drillers? According to the main street, they are out of style. According to the buy-and-hold guys, they are what national debt can look like on good days - just an incomprehensibly big negative number. But on bad days, one gets margin calls. On really bad days, one's health is affected. And this is where one needs to draw a line between fantasy and reality. The good doctor Ron knows. He knew trying to call a bottom is a very heart-broken experience and that too, is not good for the health. The once-stubborn permabull Diamond knew it too. He knew it is more healthy to be away doing what one truly likes to do than to fight the prevailing style. The bottom line is health and peace, or maybe peace and prosper. The bottom line is not arrogantly defending one's style by making personal sacrifice at all costs. It's not worth it, trust me. Predicting the future is but a human game. When one provides today's justifications (regardless of the tools used, e.g. TA, FA, mo-mo, anti-mo) for projected future, that is no longer a game but emotional attachment. This is where probability gets changed to perceived reality. This is where one is ready to make personal sacrifice for an abstract concept. The muslims call this concept Jihad when referring to making personal sacrifice for God's sake. This is no joke because this could be life and death. Shall one ever think one has the power of God? Be humble. Now how about those darn drillers? Well, if one did not read the article of GLM's historical price swing one should read it. If I remember right, the high is >$200 and the low is about $2. A buy-and-hold strategy will have to end somewhere in this big span of number to be of any use. I'm really not that smart as to predicting when and where to enter and exit. I'd rather be like the humble moms and pups who take small profits every few days or now and then and just thank God I still have health and happiness. Peace.