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

To: Mike from La. who wrote (36327)	1/30/1999 5:47:00 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 95453

Mike: Brilliant post! I would add that our rulers are well aware that excessively low oil prices threatens the peace of the world if long maintained and will (covertly, of course) support OPEC efforts to hike prices modestly. After all $15-$18 oil still is incredibly cheap and would not derail the current economic expansion to any significant degree. Even $30 probably would be no more than the historical average in real terms.

To: Mike from La. who wrote (36327)	1/30/1999 6:04:00 PM
From: Fredman	Respond to of 95453

That is the problem, and I am no exception to it. I don't know about a lot of the Political structure of the World, I don't know the supply of World Oil, but when it comes to Oil Companies, to the extreme novice, they almost all look the same. But to the people that work in the Industry, you/they know a lot better what each Individual Company is 'known' for: some have the best this, another one has the best that, another does something else better, and so on down the line. But even you folks that work in the Industry have to really work to keep up-to-date on who is doing what in which area to stay ahead of the pack........... I think it is as simple as all the above, but the key is: THIS is not a simple task to undertake: understanding all that. But also, there is more to it than this............

To: Mike from La. who wrote (36327)	1/30/1999 6:13:00 PM
From: Dragon 1	Respond to of 95453

Whew, Mikey, what a post! For one second, I was thinking you are the inauguration speech writer for Chavez. I sure hope he is listening. I have saved this post so that I can read it later. You post reminds me of the times when I drove at night through Houston Street going east between maybe second and third Aves. There, if you lift your eyes upward toward the roof of the building on the left next to the big tower clock, stands the statue of Vladmir Lenin which the Russians toppled and somebody bought and placed on that building right in the heart of the capitalist beast, New York. It was such an eerie image with Lenin's arm extended into the sky while the sculpture is being shone with a flood light from below against the silhouette of the dark sky. It's always there, with reminiscence of the bald-headed man marching into the Winter Palace in 1917. It's a spectre, a lingering ghost of the Russian revolution. As the ancient Chinese saying goes, "The tide turns every other sixty years". The death of American idealism certainly creates a vacuum in the leadership of world politics which resulted from being "politically correct" and all those bullshxx social hypocrisy dictated by domestic politics and eventually expanded to its foreign policies. The apple rots from within and spoils others in the basket. This can be seen in an increasingly clearer light as the senate trial saga unfolds. Yeah, it's a great democracy where even the dirtiest and darkest minds can be displayed openly and publicly as in not too far from the political arena for proof in the ever so hot Jerry Springer show. What have we sunken to? At this age of information superhighway, I was sent a gif. image of Hilary and Bill reading with children in a room while displayed on the page of the book they were showing the children is a blond spreading her legs. Well, too much to ponder. But I certainly love your post albeit it sounds like you are Slider #2 but I love it. I wish Chavez would read your post or you send one to him if you can. See, no leadership is the best time leadership emerges. For this thread, I think you have already provided some. Have enjoyed your thoughts greatly and thank you. Please post more. Best regards

To: Mike from La. who wrote (36327)	1/30/1999 7:02:00 PM
From: JungleInvestor	Read Replies (1) \| Respond to of 95453

Mike, the answer to the first question on your quiz is: Miguel Angel Rodriguez is the president of Costa Rica (hopefully you will not disqualify me for living there). I also hope that Chavez can be a leader for the oil nations in achieving production cutbacks that stick. However, I would never make an investment decision on what OPEC or the weather will do. You had a post a day or two ago that hit the nail on the head. The supply will be cut dramatically due to the large number of shut-ins and drastic reduction in oil company expenditures. The demand will also increase with the resurgence of Asian growth (ex-Japan) most probably in this first half of this year. As you pointed out, there will be an intersection of supply and demand that will push oil prices significantly higher - probably sooner rather than later. Recent API data is very encouraging (oil inventories are only slightly higher than a year ago). The world-wide decrease in interest rates last year will most probably result in a surge in the money supply, and a corresponding surge in the price of oil, in the second half of the year (look also for an increase in the price of gold). These are the reasons that I'm investing in the oil services sector. My favorite stock is VTS (a third of my portfolio), followed by PGO. They are both excellent companies selling at substantial discounts to their future earning power. My thought is that when the price of oil does rise significantly, the first expenditure oil companies would likely increase is for seismic data and VTS and PGO's earnings should pick up rapidly (do you have any thoughts on this thesis?).

To: Mike from La. who wrote (36327)	1/30/1999 8:39:00 PM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

Mike from LA; ie: FGI - the "Enigma'' of the Oilpatch FGI is the single most intriguing Oilpatch stock imho. You're on the right track in thinking that FGI is ''wrongly'' over-shorted here, but I'd like to take the ''WHY'' idea/theory a little farther... There are only 2 probable theories for this stock being one of the most heavilly shorted stocks in the entire Energy Sector. At first impression, it would appear that ''someone'' selected FGI, a high flyer/Mo-Mo favorite; as a target for a concerted short run. Selecting a high flying/momenteum favorite as a short candidate is solid fundamental thinking. However, the Boat stocks,shallow water/ jack up oriented drillers and high debt companies would surely have been better fundamental candidates. As FGI remains one of a small handfull of companies ''still'' projected by analysts to grow earnings in 1999 over 1998; I just do not think that this company could still carry this degree of short interest if it is indeed ''just'' a short sale candidate. Why would any ''shorter'' push the window to such a degree, when this company clearly has so much going for it ? A former Mo-mo fav, huge stock buyback, strong fundamentals... I could understand perhaps an above average degree of short interest, but not 20% + of the entire float - far surpassing even the most debt laden, problematic companies in the sector. This just doesn't make sense; the Street has virtually no track record of ''ever'' having singled out a company to this degree, with the financial fundamentals still so positive. Concerning a ''Shorter'' having Inside info - No; I agree with you here; Litigation problems if they didn't pre-warn and have a nightmare hidden in the woodpile. Also, if this was the case, they would have to prewarn right now, given the public awareness of the allmost obvious inside short play (the cat would obviously be out of the bag); if they did indeed have a major problem internally. However, in thinking that this is a legitimate, traditional short play; I have to disagree with you that HLX is the reason, or answer. Mainly becuase FGI fell first and hardest; From May to Aug (well before any HLX bad news) FGI fell from $40 to $10, 1/4th of its value. HLX fell from 12 to 7 1/2, no where near the degree of loss. FGI was allready sold off to $10 - where it is now; well before ''any'' crack in the armor of HLX appeared - and also, HLX soon bounced to $12 after the Sept market crash - unbelieveably, right back to its May levels; HLX was actually one of, if not the best recovery story after the 1st selloff. FGI allready had it's full short interest by then and had allready reached its current low; hence HLX had nothing to do with FGI's short interest. Someone had allready decided to short/sell FGI before HLX broke down. This incongruity leads me believe that FGI's unique 22%+ short interest is ''not'' related to traditional shorting; and this is why FGI is the single greatest trading potential stock in the patch. To some small degree, FGI does of course have its share of traditional short selling. But 2 main factors, one statistical/mathematical and one pure common sense; prove the point that the vast majority is NOT a traditional short trade imho. First; why wouldn't HLX have a rising short interest, and/or even have a higher percentage of short interest than FGI presently ? HLX does not have FGI's balance sheet, much higher debt, poor fundamentals, worse earnings outlook, massive overhead, and much worse public news; but yet HLX with arguably one of the worst set of fundamentals and on paper appearing to be ''the'' posterchild for a short candidate in the entire Oilpatch - has only 6% short interest versus 22% for FGI - why ? Well, the answer is because FGI's short interest is ''NOT'' from traditional short selling and one can make a lot of money trading this stock accordingly. Theory #2 seems to be the only possible answer imho. The ''mathematical/statistical'' answer says - FGI is not a ''traditionally'' shorted stock. FGI has only 168,000 shares short via put/options; but has 2.64 MILLION shares short ! Shorters like to cover the downside, and also use leverage traditionally - hence this completely out of whack ''put to short'' ratio tells me - this stock is not ''REALLY'' a traditionally shorted stock ! Now where does that leave us ? Only one answer that I can come up with... ''Someone'' who is NOT interested in the short term (as puts only go out a few months) and who does not want options to expire worthless, or to waste premium money etc. - merely wants a ''hedged'' position in FGI. A simple short sale - eliminates the active trading, and the management necesssity of using options; and eliminates unnecessary costs and risks, if indeed it is a hedge play. Hence; imho - ''someone'' and most importantly; ''someone'' who is Long in a big way and in a ''permanent'' way; is hedging a very large ''long'' holding in FGI in the absolute most cost efficient, risk free and logical way. Suffice to say; this leaves a pretty short list (no pun intended)... not much imagination is needed here... If this is the case; these short shares will become ''unlocked/covered'' a little later than a traditional ''short seller'' would cover. Good news longterm, but not great news short term. If my theory holds; FGI will report surprisingly good earnings, backlog and forward looking prospects. However, I don't think the short interest will ''cover'' here; as it is not a traditional ''short - trade.'' This is a ''hedge'' and imho, will not be unlocked/covered untill Crude Price and the Oil Sector Cap Ex fundamentals firmly recover. - I believe, it will take a shareprice of over $24, crude prices over $15 and a recovery in new contracts, construction and overall sector activity before FGI sees virtually any major degree of its short interest is unwound. However; this basically does - artificially reduce the ongoing ''trading'' float from here; so we will get the same virtual effect of a pop with good news; but will have a ''shadow-pop'' factor (good term BD !) built into FGI for the 2nd phase in the Oilpatch recovery. FGI will bounce here if it meets earnings estimates and has a solid backlog. But, the short covering will not be a factor here, but will be a huge factor later when Oilpatch fundamentals clearly recover. FGI will mirror the rest of the sector;as it did in the Sept, & Oct bounces - it neither led, nor lagged its peers... even though with it's huge short interest if should have led...another point here, that the short interest is ''not'' a normal trading-short position; otherwise FGI would have spiked higher than it's peers on all of these bounces of late... In a nutshell; FGI is a great trader right here, right now. But, FGI will be the ''best'' trader later.... so; we get a little 2 for 1 action here imho... a nice pop today and a huge spike tomorrow... FGI will slightly outperform the sector here on any run ups perhaps because of its reduced ''trading'' float and will far outperform its peers when we reach an acknowledged period of positive recovery in Crude fundamentals & Cap Ex spending. FGI is a solid buy here today; but more importantly, it is ''the'' buy tomorrow... Better beat the crowd to the party on this one; because if FGI reports positively and the shorts don't cover - the cat will definitely be out of the bag on this one...

To: Mike from La. who wrote (36327)	1/31/1999 10:40:00 PM
From: Pete Young	Read Replies (1) \| Respond to of 95453

Hey Mike, keep "rambling"--great post, IMO. This guy Chavez sounds like the nationalistic, anti-west leaders of the late 60's through the 70's in the ME; namely, Nassar of Egypt, (Suez canal, remember?), Quaddafi (nationalization of Bunker Hunt's holdings, 50% of ENI (Italy's national oil co) in Libya, 1973), of course, Sadam Hussein (who was anti-western long before Kuwait), and Iran's revolution against the Shah. (Heck, the Shah himself was somewhat anti-western...which didn't do him any good in his time of need.) Think Chavez can pull OPEC together like Yamani, or before him, Tariki? Certainly as you say, a vaccum of ideas...here in the US; 'mo money ain't going to do it for most people, that is, the people in the oil producing regions. Calm before a storm? Pete