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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: kha vu who wrote (25139)	2/15/1999 8:52:00 PM
From: Dayuhan	Read Replies (2) \| Respond to of 120523

The oil bottom is difficult to call, and there are factors operating that are hard to predict. The low prices are putting huge pressure on major producers, many of whom have been running their national budgets off oil revenues. The response has been to pump more oil, exacerbating the glut and forcing prices lower. Now Russia, Indonesia, Mexico, Nigeria, and most of all Saudi Arabia are in a position where further cuts could easily break the camel's back. At some point they will either have to effectively cut back production or one or more of them will face internal disturbances that could reduce or shut down the flow of oil. Either way, a steep rise is very possible. There are many very strong companies in the oil services sector selling at very low prices, an I think it's a sound idea to keep some in the portfolio. At least then you can smile when people worry about the Saudi monarchy crumbling. I'm in FGI, TMAR, and DO; there are many others. Many are at or near 52-week lows, some are selling near or under book, a lot will qualify as beaten down but fundamentally sound. A good hedge is transportation; there are many good value buys there and they all stand to benefit if oil stays low. Look at FDX, CDLI, OTRX; again, there are other good ones. Caveat: I work purely from fundamentals, no interest in TA, and look at a 3-5 year hold. People with different methods will have very different preferences. Steve