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Gold/Mining/Energy : Swift Energy (SFY) -- Ignore unavailable to you. Want to Upgrade?

To: Robert T. Quasius who wrote (690)	3/6/1999 9:21:00 AM
From: Mark	Read Replies (1) \| Respond to of 1602

I'd appreciate people's thoughts on the best O&G (and related) stocks to be buying at the moment. My thinking at the moment (and the context for the question) is as follows - I suspect that we may have passed bottom. There are very good reasons why commodity prices may be on a sustainable rise - for oil there is just too much political pressure to allow things not to be resolved, and for NG the decline in drilling possibly means we have a shortage coming (plus the strength in oil will also help). I think that most techs are over-valued, and even though I am now 60% invested in O&G I would like to take that higher. (My portfolio overall is not very big and is a small part of my overall investments so even if I go to 100% I'm not being too reckless!). In the face of strengthening market prices, I suspect that all O&G stocks will enjoy significant growth over the next few months. However, I also suspect that the significant growth that I want to see over the next 2 - 3 years will be driven by earnings growth (rather than just a change of sentiment). This also implies buying smaller cap stocks (<$500m). Now, one suspicion I have is that we have a food chain at work here, and at this stage I would like to avoid those companies lower down on the chain. My thinking is that the cause and effect relationships are - 1) Oil & Gas prices rise in a sustainable way, 2) Producers enjoy improved market prices, and their profits quickly rise, 3) Improved cash and cash flow increases their confidence, 4) Improved confidence and improved cash increases their investment, 5) Increased investment improves their exploration and other activities, 6) Increased activity creates higher levels of work for drillers and related support companies, 7) Increased drilling and related activity starts to drive up rates. 8) Profits rise in the drillers, etc, Now, one special group is the transportation stocks (TMAR, HMAR, etc.). I suspect these guys currently have some specific problems - i.e. that there is oversupply in the GOM. I think that puts these guys late in the cycle - i.e. quite a long time will be required until they start to enjoy really strong profits again. (Though they will probably enjoy quite a short-term recovery). Does the above make sense ? Should I buy more production based stocks now and buy drillers at the end of the year ? Which ? Gentlemen, your suggestions please. Mark p.s. I like SFY a lot but have as many as I want now (!)