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To: Peter V who wrote (8023)	3/31/1999 9:25:00 PM
From: SJS	Read Replies (1) \| Respond to of 14427

Pete, LT investment, scalp, or ST trade? The answer on getting in depends on what your objectives are. I think it's a little high for a ST trade (meaning there might be some downside risk as EMC correlates very highly with the overall mkt tone and direction....), but if you want to own this for a while, it's going to make you a ton of dough. It easily moves +/- 3-5 points in a day, so you could daytrade it and get your scalp. Was that too thorough an answer? <G> Put another way, I didn't write puts on EMC this month, and have done so successfully for the last 14 months......Put premiums will increase for EMC in April, since they do their earnings. I don't think there is much risk of them failing to made their earnings, and their quality will also be high. I expect their quarter to be great, they have lots of recco's and with their return to shareholders, they are "the darling" right now. The window dressing this last week was truly FAB. Split coming (announced) in MAY, depending on shareholder approval (a no-brainer). They are going to authorize 3 billion shares, and have about .5B out now. If we get the stock high enough, they might give us a 3 for 1!!!

To: Peter V who wrote (8023)	3/31/1999 9:51:00 PM
From: Thean	Respond to of 14427

Pete, the drillers in general and RIG in particular had a 50% move just last month based purely on forward speculation. Rig utilization and dayrate, two key measures of their bottom lines over time, are not improving but are still on the downward slope. With oil stabilized here between $15 - $16 1/2, these two indicators may just begin to base. That was the case too a year ago until the realization of big OPEC cheat together with the further deterioration of Asian demand pulled the rug under. The leading indicator that signal a sustained recovery for the driller stock price will be the upward revision of exploration spending by the major oils. Until that time, I would not feel comfortable holding the drillers. For that to happen, oil has to be able to sustain (average) above $15 for the rest of this year. The majors typically start to announce their future year e&p spending by the end of the third quarter. The average price of oil between now and next fall can influence the psychology of the decision makers at the majors. But the future projection of demand will still be the key driver. So it goes back to global demand as projected by the oil economists who work for these companies. There lies the fundamental fate of the drillers going forward into next year. Of course, a crazy driving season with big US demand on gasoline will fuel the upward price speculation on the drillers but that is unsustainable without actual sustainable demand. I think we can do at least 5 rounds of +/- 15% cyclic move on the drillers till the end of summer. Overall, the situation this time is better than last year because OPEC appears to have done a more convincing job of not to cheat and net Asian (including Chinca and Japan) GDP growth in 1999 is projected to be a positive 2% with consensus believing the bottom was reached last fall. For perspective, the net GDP growth in 1998 was slightly negative (largely because of China's buffering capacity) but SE Asia were more like negative 8-12%. So this year's slight improvement is a plus but really nothing compares to the heydays of the prior 5 years when the GDP growth was positive 8-12%. Still, SE Asia economy has to work off their still excessive inventory level. The manufacturing sectors (electronic and semiconductors) for export to the West are still doing well despite the dark cloud of depression surrounding them. That can change in a hurry if AG increases rate to try to slow down an overheating US economy. Western Europe is not doing as well as the US at this time. So, go back to your "it's the price of oil, stupid" question. Today was just an anomoly. I would not count on this one day deviation to draw excitement over. As long as oil does not suddenly lose $0.50 and $1 (like strong rumor of bad cheat number coming out), I would expect this overall positive sentiment to continue. Therefore, I think the correct strategy is to buy on weakness and sell on strength based on the 15% +/- cycle.