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Gold/Mining/Energy : Global Santa Fe (GSF) (formerly Global Marine) -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (1181)	2/11/1999 11:52:00 AM
From: Zeev Hed	Respond to of 2282

Stitch, GLM broke to a new low and my experience has been, new lows begot new lows, so the danger sign on this sector should not be lifted yet. Maybe the "srping relapse" in the high tech would bring a relief to the sector under the guise of "rotation" and impending summer driving, but I am not placing big bets on that. Zeev

To: Stitch who wrote (1181)	2/11/1999 11:58:00 AM
From: Robert Douglas	Read Replies (1) \| Respond to of 2282

Stitch, *OFF TOPIC* Any other ideas in the Russell or about Zeev's Spring retrenchment forecast? Here's an idea I've been working on. It has two things in common with GLM. First it has been killed lately and second it is located in Houston. It is Service Corp. International, the leading provider of “death-care services”. That means they own a lot of funeral homes and cemeteries. Maybe there are some posters, other than I, that are looking into this. I just placed the second post on the new thread started here on SI. Take a look and if you want to comment on it please do. It certainly falls in the category of holding for the long pull. exchange2000.com -Robert

To: Stitch who wrote (1181)	2/11/1999 2:48:00 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 2282

Stitch and all more knowledgeable than I, I keep thinking about the long-term situation in the oil patch. Perhaps it's silly to think on such an epochal scale, but I really believe that the rewards are so great that trying to time this might be foolhardy. Here are my thoughts: Caution, some of these numbers are from memory and since my 40th birthday a year or so ago my eyes and my memory are becoming less dependable, but I am quite sure they are at least close. 1- A few years back the Oil and Gas Journal reported that proven reserves of oil were around 1 trillion barrels. Three-fourths of this is held by OPEC. 2- Present consumption is approximately 75 million b/d. (27 billion b/year) 3- Recent numbers indicate that 2/3 of growth in oil demand comes from non-OECD countries. 4- At the present rate we have an ample 36 years of reserves. If however, demand grows at 3% a year that same oil lasts only about 25 years. Is 3% growth realistic? Answer that question and all others don't matter. I think it is. The IMF estimates that world output (real GDP)grew at 3.3% a year during the 80s and 3.2% during the 90s. For developing countries these rates were 4.3% and 5.7%. This is where things get interesting. Energy consumption plotted against GDP per capita is not linear. As GDP per capita grows the demand for energy grows faster. A decade from now, at current rates of growth, these countries will be entering the sweet-spot for growth in energy consumption. Today's growth has come from adding more consumers, growth then will come from those consumers using more and more oil. At this time I expect to see all sorts of Malthusian arguments resurfacing about the finite resources of the world. I, of course, don't subscribe to Malthus Monthly but the market solution to these worries will be, here it comes, MORE DRILLING. Now a decade may seem a long time to wait but I don't think investors will have to. I think the markets will recognize this far in advance. Indeed, I think they were just beginning to discount this right before the Asian recession raised doubts about development in these countries. That snort was tiny compared to the bull market that these stocks could experience. Since I am sanguine about the return of growth to the developing world, I believe that these stocks will rebound as soon as this recovery becomes apparent. Other things to consider: -Since non-OPEC oil is being drawn down faster; the incentives to replace it will arrive earlier than if the situation were reversed. -Large finds are becoming fewer. Hence more wells needed to replace reserves. -Natural gas demand influences drilling. Please, somebody tell me if I am being an idiot. This is not my area of expertise. You will save me a lot of pain and not offend me the slightest if you can poke big holes in my argument. -Robert