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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (3873)	1/13/1999 1:44:00 PM
From: James F. Hopkins	Read Replies (3) \| Respond to of 99985

X, I've worked in the offshore oil service sector for 20 years and was in it on the last oil glut, and 80% of the companies went chapter11, the only one you can chart back that far is HAL, she was selling at five, all the rest went to zero. So do some real DD, and get the RIG count, and LOOK at the debt each company has taken on and ask yourself how are they going to pay that debt , day rates are dropping on each negotiation, the price of oil has little to do with these stocks until it's been up for a while volume of oil ie "PRODUCTION", is what the service sector lives on, they depend on the BIG oil companies to spend money, not cut production to get the price up.. This sector can go much much lower before it's over if Asia can't afford to by oil, on top of that any oil price forced up by production cuts, will come home to bite every one on the rear end. Oil is factored into every thing we buy, and had oil not got cheap, this economy would have crashed before now. -------------- Last but not least with these smaller oil service stocks, "DO NOT believe the book value, particularly if they have a lot of debt..you would not believe the way the fabricate prices on the equipment to borrow money, and the way they obtain book value would make a prostitute blush. So do some very good DD, call the companies of visit the location and see how much action is going on or if every one is just twiddling their thumbs. The profit these people show , trail the work they get by about 6 months, and if the RIG count goes down 20% ( and it is ) there goes profit margin. IF GreenSpam will give Asia some more of our money so they can buy oil that may help out this sector. But if oil comes back any time to soon, just look at it as you would a big interest rate hike. The rest of the world has to heal some, before demand can go back up, cutting supply to run up demand, is a solution that don't work out in the long run, it just cripples the developing countries, and we need them not crippled if we are to have a market for our widgets, and all.. ----------- Jim PS hope I don't sound upset, but I am, damm waterhouse and just about half the other web brokers are all screwed up any time the market makes a move, and you can't even get them on the phone, it's like being in a third world country. All this hype on CNBC about e-trade and them suckers don't read the mountain of complaints on SI, ( yes they read them, but the "sponsors will cut off their adds if they say anything about them. ) Most news reporters have about the same ethics that a pimp has, and that's giving them the benifit of the doubt, and sort of over rating them.