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To: The Perfect Hedge who wrote (2263)	8/29/1998 1:24:00 PM
From: Thean	Respond to of 14427

Beebs, If you have a long horizon, like 1-2 years, you may come out ahead by buying and averaging down and up the drillers now. Note: I did not say making money, I say not losing money. But if you are lucky and oil can command a sustainable higher price in $18 and above, then you will triple your money easily. Between now and then, it is dead money. Hope you understand what dead money means. Other than that, their valuations are reasonable for now. However, further weakness in oil price or an inability to command higher price will further kill this sector. RIG CEO recently said they are fine for 1-2, maybe 3 years. However, if oil is trading at $10 in 1 year, these deepwater drillers will be doomed too. Do not let the "long term" contract fool you. Contracts are written to be changed or restructured. In bad oil price condition, everything becomes short term and their dayrate will be slashed to market or below market level. That's all my long term perspective in the drillers. I have short term perspective too. And they are as good for trading as any other stocks. If you are interested in short term trades, I do occasionally throw in a few lines about them now and then. If the market gets a bounce sometimes next week, I expect the OS to gain about 10% from their current level.