jamino1

Deepwater Drillers: Not in a Very Deep Hole

I own a block of RIG and had owned GSF as well before the merger. While there are certainly risks going forward and these shares can certainly go lower, they are in my opinion low enough to begin accumulating now. One factor that needs to be considered is that capitol intensive industries such as oil service have an advantage in a capital constrained world. It is difficlt and expensive to build these things and none will be ordered or built in this economic environment. THe worst thing about the fall in the price of oil may turn out to be a good thing. ANd that is the price fall was very rapid. IT has more to do with the continued deleveraging going on than the acknowledged demand destruction. Prices may return to higher levels sonner than most people think even as they can still go lower in the short run. RIG is my favorite. Like XOM, they know what they are doing and they know how to survive in the hard times and make tons of money in the good times. IT is good to remember that oil has enduring and constant utility. World currencies do not and what the world is doing to paper money right now almost assures we will see another oil spike in the not too distant future. Buy low; sell high. Keep leverage low or non-existent so you cannot be taken out against your will.