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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (7438)	5/5/1999 8:14:00 AM
From: JZGalt	Read Replies (1) \| Respond to of 18933

OT - Amazing how the energy sector is coming back. Don't believe everything you see in that gain. Oil costs $7/bbl to produce and it is now flirting with $19/bbl. That means for every bbl produced the profit is approximately $12/bbl. Since there is considerable production capability within the Latin American countries, expect to start hearing about cheating starting soon. On the earnings side, earnings come from using the assets you have in a productive manner. I've seen no evidence that the utilization rates in the offshore industry have turned. People are assuming they will turn since it follows that more drilling will be started with oil prices this high. Production is down so oil prices move higher which will then draw more drilling activity and more subsequent production. The hope at this point is that demand will pick up to offset any increased production. I'm an agnostic at this point. My feeling is/was oil wasn't going above $14/bbl so I didn't participate in this rally to any large extent (I figured 30% gain at most, not doubling we have seen in some issues). MXF certainly prospered as their ability to produce hard currency bouyed their outlook. In any case, these are cyclical industries with a long time between boom and bust and good AIM candidates as you and Robert know assuming you don't run out of cash. 20/20 hindsight says that last winter and this spring was the end of the bust period, but it remains to be seen if the boom is going to arrive. Like I said in a previous notes, I've been sticking to growth related to what we use here. Nicest win to date was AHAA which I picked up in early March and a ton of CTXS in early April in the mid to low $30's along with a host of internet enablers (ADPT, DCTM, FVCX, GCTI, JDEC, PSFT, MTON, TSAI, VSVR, LGTO, MERQ, SEBL). Takeover and takeover rumors in my former plays are providing cash (ASND, XYLN, LEVL, VLSI, FORE, NN). Hardware plays within bandwidth are becoming too difficult as the industry consolidates and data and voice intermingle. Time to move on to the software plays, servers, video over internet, storage that benefit from all of that bandwidth that is created. None of these is your traditional AIM'ble stock which is why I haven't recommended them. Oil and the internet aren't going away which qualifies them for AIM. The trick is to extract the money. Lot's of ways to do that. <grin> ---- Dave PS, NN is going to get smashed today.