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Gold/Mining/Energy : Harken Energy Corporation (HEC) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (3527)	9/7/1998 4:39:00 PM
From: Ed Ajootian	Read Replies (2) \| Respond to of 5504

Classic post from dhrosier on Yahoo: The problem started out when the price of oil cratered. Add to that the worry over a recession or depression in enough sectors of the world and you have a low price for oil with uncertainty as to how long the price might languish. The biggest weight here is the uncertainty. Alan Greenspan's comments Friday evening have already attracted considerable interest. Money has been quite tight when you look at the "real cost" of renting it, that is the combination of Fed rates (5% or so) and inflation (zilch to 3% depending on how much weight you give to phenomena ignored in estimating inflation). The Asian crises arose much for the same reason as our own S&L crisis, that is people having unfettered access to very large amounts of other people's money. While there is a lot of capital that has evaporated in Asia, the primary problem is psychological, they have to focus on the things that work and get beyond the things that need to be dismantled. They can still have a vibrant economy although the rates of growth will likely be more realistic. How many of you remember PORTFOLIO INSURANCE? The folks that brought us that tool were very smart, maybe even smarter than Zeev. The idea actually worked so long as only a handfull of folks were doing it. The problem arose because these folks were SO smart that everyone had to have one of these wonderful toys! When the October 1987 correction started the actions taken to implement portfolio insurance started feeding on each other and the result is history. I am amazed that so much de facto credence continues to be accorded to the death spiral floorless conversion scenario. First, after extensive study it is clear that the Harken instruments give marginal protection, at best, to those who hold the Harken convertibles who might decide to pursue an aggressive short sell strategy. Anyone who wants to argue that will have to go back to mid June and read forward in the posts here and on SI as the debate has already consumed more time than it is worth. The PIGS who have sold Harken short have been rewarded by incredible fortuity! Their windfall is the result of the price of oil, the global market corrections, and the self fulfilling prophecies of their own short selling. I seriously doubt that any of the short selling in Harken common stock has been done by either Harken convertible holders or their proxies. We are now at a point where the price of oil appears to be rebounding slightly, Mr. Greenspan sees the light on interest rates, the Russian and Asian markets are rebounding while the US rests on Labor Day, and the supply of oil from several developing nations is proving to be not quite as forthcoming as generally thought. Which brings me to the HOGS. At this point, the big money has been made shorting Harken. Anyone who continues to hold their short position is taking an incredible risk, a risk of unlimited losses in fact given the possibilities of the Islero project. Thoughts that HEC might dip to $3 are self induced pipe dreams. And to what end? A few more pennies on a short where they can lock up dollars of gains. Tuesday we just might see the HOGS, if there are any left, get slaughtered. ************************************************************************* Thanks Dreighton, couldn't have said it better. But as much as a HEC bull as I am I would not be surprised to see HEC dip below $3 slightly. They are entering a phase where there is high risk (due to the Islero) so there will be a steady flow of money out of the stock. If this outflow is not met by new buyers, the stock will trail down. If the stock goes much below $3 I plan to buy some more.