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

To: MARK BARGER who wrote (33139)	12/19/1998 8:33:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Instant gratification, investor sentiment and the war of emotion vs. logic... Nothing exemplifies the state of todays Market & Investor sentiment like the Oilpatch. The instant gratification nature of our society has extended into the world of investing and finance. The plethora of information and statistics has led to an era where longterm investing now means - one quarter... Value investing means buying AOL or Yahoo after it splits... Mutual Funds must sell their losers at months end, if not surely at quarter's end; as they can no longer afford to have these losers show up on their lists... The volatility of todays's Oilpatch personifies this fickle enviroment like no other. Mutual Funds returns are posted daily, weekly, monthly and quarterly... the quarterly and annual return/performance statistics are virtually meaningless; as todays investor and media is using a weekly/monthly return/performance yardstick. "Daily'' most up or down lists are everywhere. No Mutual Fund can afford to ride out a storm and take a large monthly hit; they get large outflows of cash if they do; hence we see the end of the month and end of the quarter housecleaning of the losers - so that these holdings don't show up on their top holdings lists etc. Todays average mutual fund can not afford to either buy into weakness, with perhaps a continued small to moderate downward trend like the OSX may have, even with the potential to move upward 20-50%. Individual investors will punish a fund that buys into weakness; even when the mid-longterm upside dramatically dwarfs any remaining potential downside... Only a few, select, proven value funds and managers, dare venture into times and sectors like our oilpatch. The volatility here is due to so many Funds not wanting to miss the move up here ; as demonstrated by the incredible volatile spikes upward of the 2 prior moves off of the Sept & Oct selloffs. However, they can not afford to ride a downturn, they are in & out as the wind blows; jumping on the train everytime the wheels start to turn, or the train shows some steam; only to immediately leave at the next exit on any sign of slowing... This is a rare opportunity where the individual investor has a distinct advantage over the institutional investor. One can take advantage of the obvious tax loss selling by the Funds here; as mentioned before - without question; the Oil Patch is ''the'' posterchild for tax loss selling this year. The cooresponding absence of buyers that the obvious tax loss selling brings is a blatant and glaring opportunity to buy any dips that present themselves here in this period of the Oilpatch being ''underbought.'' The lack of support of buyers has especially led to compelling buys in a few select companies that have the best fundamentals of the oilpatch; those with positive earnings growth even in this enviroment; PGO CXIPY CDIS SCSWF are especially attractive as are the leaders like RIG RON WFT at their bottoms; give me all the RON near $22 that I can get, CXIPY @ $30, PGO @ $12 1/2, SCSWF $6 etc.... It is so against human nature to first of all be patient, secondly to go against the grain and to buy when everyone else is selling and to third, be able to ride out the storms (volatility) and to hold steady in a torrent of negative media hype and spin; even when it takes on a nonsensical, illogical and clearly ''spin-doctored'' tone... The key to what I firmly believe will be historic returns from todays Oilpatch is that so many, are trying so hard to ''over-kill'' the Oilpatch. The ambiguity, and blatant inconsistancy with the EIA numbers (now under Congressional Investigation) and the ''spin'' on the over supply figures; which when viewed as a percentage of actual days of use - are not at all - out of line with historic norms. We are using more Oil than ever before; the total number of barrels is irrelevant, the percentage of our use that is in storage, or the days of use that we have in storage are ''the'' relevant numbers. There is more than a strong probability that when it is convenient; the entire subject of this historic ''Glut'' will suddently disappear... Oil will and must rise again; it is being artificially depressed to allow Global re-flation; as rising Crude would trigger inflation; which can not be tolerated by the current Global Economic Policy. However; I believe it will be allowed to gradually rise to historic normal trading levels; as many Crude Producing Nations are teetering on the brink of collapse; this Global Management is walking a fine line between keeping commodites depressed during Global re-flation and then ultimately allowing the Brazil's and Venezeula's of the World to be able to re-pay International loans with rising crude prices. Time will tell and a very possible ''rubber band'' type of snap back is also highly possible. I see a tremendous opportunity to buy at historic lows that have been artifically depressed/managed and who will be managed back to historic norms in a worse case scenario.