Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: tdl4138 who wrote (31866)	11/17/1998 8:16:00 AM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

<< Why are people optimistic about the energy sector...>> Because we are in a CYCLICAL COMMODITY sector. Cyclical; as in cycles, as in - what goes around - comes around.... as in the bottoms lead us in a circle to the tops.... One of the pure trading plays that has been proven over time, virtually impossible to criticze, is buying crude or the oilpatch at the bottom of ANY 10 year cycle low; or virtually any other commodity/sector at the bottom of ANY 10 year cycle. Indisputably profitable over time... However - don't confuse that with there not also being great short opportunities as well. It is NOT a bear vs. bull; long vs. short arguement here. Both long & short opportunities exist currently as we are in a dramatically volatile trading range here. However, these violent swings usually occur in the transition point in cycles. I would say that when companies finally make those massive layoffs, when they cut budgets, when dayrates reach the pain threshold levels, when Rig utilizations reach cyclical lows, when no one wants the oilpatch - is just the time to be buying. Buying on intelligent entry points, not all at once, not accross the board, but cherrypicking companies and entry points. One doesn't have to pick the exact bottom to enter, to be profitable over time and it is very hard to pick an exact bottom. However; when we have just seen 2 bottoms clearly established; and most importantly ! - immediately followed by 2 dramatic legs up - resulting in 30-50-60%+ gains; how can anyone with either a trading, or more importantly, anyone with a longterm investing strategy, ignore another selloff in light of the current worldwide Economic policy ? This is a classic commodity bottom and is a rare opportunity, in that we are seeing a historic coordinated International effort to cure the ''demand/liquidity/currency'' problems. To think that some new bottom or 1929esque crash is coming is to ignore the exact opposite. Only the ''clueless'' would fight the Fed & International Rate Cuts and a $195 Billion Japanese Stimulus package longterm here. Sure, we may have a window of nearterm opportunity for shorts; but that window could at any moment slam shut; crushing any & all shorts with news from many different fronts. Remember Mr G's Hammer ? How can you Shorts have such a short memeory ? The risk versus reward has never been better in the oilpatch. The case for a ''new'' much lower bottom has not been made here. Someone give me a scenario to where HAL is going to $20 or FGII to $6 - please ? Explain how this is going to happen into the face of International Rate Cuts, Japans stimulus package, the evolution of natural demand cycles, companies downsizing & cost cutting , while most companies are still actually very profitable here ? Longterm, the future gets brighter here every day imho. Japan's $195 BILLION stimulus package is virtually the last piece of the puzzle I needed to see. Also; if the Fed does not cut - it's a good sign that the economic expectations (read DEMAND expectations) are good. It makes a December Cut that much more probable. We can not lose here longterm. Sure the traders may move this back to near or even at the prior lows, ( I pray they do - I'm 40% cash here) but do average into these moves. Also, unlike last June; we've had 2 major 50-60% spikes off of these lows... what's changed ? Buy 'em & Hold 'em if we retest those lows; the Street has allready told us twice in 2 months that we will get 50-60% returns shortly therafter... even if not shortly thereafter - who in their right mind would not hold for 6 months for 50-60-70% returns . Hello People - the Street wants very, very badly to own these stocks ! The recent 50-60% ''pops'' in days & weeks on any movement here shouts that fact ! There is not a ''demand'' problem with the Street wanting to own these stocks; there is merely a ''timing'' problem (read opportunity) for traders... Sorry folks; No Oil Bust here; no $Milllion Dollar Homes in Houston on the auction block for pennys on the dollar anytime soon... Don't you guys - ''get it'' ? Cheap stocks and Strong Fundamentals don't exist simultaneously ! If you want them cheap - gotta buy them when the fundamentals are in transition, or at the bottom... if the Street gives us another (3rd !) bite at the Apple - I say ''Chomp'' off as much as you can ! Long & Longer....