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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bill Zeman who wrote (5942)	2/5/1999 4:13:00 PM
From: Don Earl	Read Replies (2) \| Respond to of 78464

Hi Bill, I'm not an expert in the oil industry but it seems to me that with a limit on natural resources, someone still has to poke holes in the ground to look for more. Everything I've seen points to over production as the problem, not a lack of consumption. I wouldn't think that oil services would take the kind of hit to margins that the oil companies are. To me the whole idea of value investing is to move on beat up issues while everyone still hates them. Take a look at EGEO. The stock is trading at 1/2 of what the company has per share in cash and the revenue growth sure doesn't look like any kind of slow down. marketguide.com I only have 10% of my portfolio in EGEO because of some of the concerns you mentioned, but those fundamentals were just too hard for me to pass up. Regards, Don

To: Bill Zeman who wrote (5942)	2/5/1999 7:54:00 PM
From: jeffbas	Respond to of 78464

Nice post. The situation as you describe it reminds me of what happened after the oil bubble burst in 1981. Having made a lot of money on oil stocks in 1980, and giving most of it back in 1981, I do not have fond memories, and have not followed the industry since. Your outlook for the industry is exactly what happened then. Only the large cap companies and the best of the smallcap companies survived, and the smallcap ones were in doubt and in the low single digits for a long time. Based solely on your outlook, anyone interested in buying smaller ones should avoid any with material debt outstanding, and plan to average into a position over a 2-3 year period.