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MRV Communications, Inc. Message Board

  • normboyz normboyz Apr 1, 2005 1:17 PM Flag

    Check out the froth in the oil patch

    Valero Energy (VLO), the "poster boy" stock of the oil patch has gone from $68 to $76 in less than two days on the GS call for $105 barrel oil. A little bit too frothy IMO.

    This all seems way too similar to the tech boom in 2000 at the time of the calls for QCOM to hit $1,000 share and Commerce One (CMRC) (which doesn't even trad anymore) going to $500.

    I know the oil biz has real earnings, but still, even tech stocks with good earnings went vertical (IBM comes to mind) during the internet bubble hype and five years later it still is not close to that all time high.

    And as this oil boom has matured, and drawn more investors in, there sure seems to be even greater enticement for the brokerage houses to raise the hype and speculative forces to create the bubble, which as it gets bigger, makes it more likely for the crash to be more severe. That, my friends, will be start of the next great bull market.

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    • bourbon_on_my_cornflakes bourbon_on_my_cornflakes Apr 6, 2005 12:53 PM Flag

      Hmm, the catalytic converter maybe makes it OK. MOst US diesel cars I see still stink big. As do a lot of the small Japanese cars here, which smell like sour sulphur for some reason.

      I have a Cadillac and am very pleased with its gas mileage, safety, power, room, handling and style. All in all quite practical and efficient for the US driving conditions. Would also be great on the autobahn.

      Safe driving to you and yours!

    • Burbon a # of things to answer� #1 and most important is the wife (boss) who only drives the Micra around town so she would never go above 50 kph = 30 mph. I agree that if in a accident it would not be the best at high speeds but if she wants to do that she takes the Audi.

      Regarding diesel engines they are not like they used to be and the new models with the Cathalitic (not right spelling ) are very efficient. The consumption per gallon is fantastic but we have to have an omissions test every 24 months.

      We do use public transport a lot and we have a very good train service to Dublin from Bray 14miles that runs every 10 minutes and costs only �3.50 return


    • Good points, BUT: it is easily affordable for the people who can throw $700K+++++ on a house.

      Many of those folks (and I know quite a few) can only throw a paltry down payment and creative financing. They're already having problems.

    • bourbon_on_my_cornflakes bourbon_on_my_cornflakes Apr 6, 2005 11:23 AM Flag

      LOL relax. I am talking about what you see on the streets...which is Town Cars and big Fords. But of course many people use public an old city, NYC is one of the places where it makes sense.

      <Liberal New York is a pretty energy efficient city compared to conservative Columbus or conservative Denver>

      Yes in the sense that it is very compact and dense. No in the sense that there are plenty of lights left on in the skyscrapers even though no one is there.

      BTW, congratulations on being a lot smarter than the average NYer.

    • Okay, I guess I am a liberal New Yorker. I walk everywhere, take subways and taxis (when in the city), and take advantage of our expensive but fairly efficient public transportation. I own two small Hondas and use them sparingly. I do know people who keep Town Cars, but out of our 8 million people, most rely on public transportation. Taxi prices just went up again, but sometimes they are the best option. We can now get to JFK on two trains, or a subway/train ($7) from NYC. Liberal New York is a pretty energy efficient city compared to conservative Columbus or conservative Denver. By the way, my liberal wife and I voted for our man Bushie.

    • bourbon_on_my_cornflakes bourbon_on_my_cornflakes Apr 6, 2005 10:56 AM Flag

      <my current car Audi T4 1.9 TDI gives me 35/38 miles per gallon Urban cycle and 55 mpg on long runs. My wife runs a Nissan Micra which does 45/48 mpg.>

      I'm guessing that a T4 is a diesel engine model not sold here. I hope diesels do not catch on here because they stink to high heaven and destroy the environment with their particulate emmissions.

      A regular A4 is an OK car (I drove one before I bought my new car) EXCEPT the back seat has no legroom. Got to get an A6 for acceptable legroom if you use the back seat much.

      Would never drive a micro car as they are not safe enough in an accident. Guess it depends how much it would bother you to replace the wife. ;-)

    • bourbon_on_my_cornflakes bourbon_on_my_cornflakes Apr 6, 2005 10:49 AM Flag

      Regarding macmansions, these factors will limit any decline:

      1. Many jobs are suburban now, so the macmansion is not as far away form work as you think.

      2. Macmansions are designed with modern windows and insulation. So their cost of heating is not as high as you think. I know of a very small house, NE saltbox style, naturally efficient, but 70 years old and drafty. Costs $300 month in winter for heat. A 3 bedroom ranch with modern windows and insulated walls, extra insulation in the ceiling, costs $300 for heat per year. So even if a macmansion costs 3 times that of the ranch, it is easily affordable for the people who can throw $700K+++++ on a house.

    • bourbon_on_my_cornflakes bourbon_on_my_cornflakes Apr 6, 2005 10:40 AM Flag

      Funny thing is the regional differences in vehicles, many differ from what you expect.

      For example, liberal NYC is filled with huge Ford taxis and even bigger stretched Lincoln Town Cars.

      Red state Virginia's car population is 75% small Japanese cars like Sentras and Accords. A fair number of trucks, both domestic and Japanese.

      Central PA is mostly domestic cars like Chevy's, Fords, Chryslers.

      New Mexico is 70% pickup trucks.

      The explanatory factor is driving conditions. NYC you have someone else drive and want a big back seat.

      Virginia, like most of the sunbelt, is very spread out. Got to drive 10 miles to get anywhere.

      Central PA ia small towns, relatively short driging distances.

      New Mexico has a lot of unpaved gravel roads, hence trucks.

      Anyone else have some comments on their region?

    • bourbon_on_my_cornflakes bourbon_on_my_cornflakes Apr 6, 2005 10:31 AM Flag

      Some thoughtful stuff being posted on energy. Nice.

      My take is that Americans realize that the 99c gas we had in the 90s was a gift due to temporary factors such as the Asian economic crisis. I think there has been little angst about $2 gas because that is about where the long-term real price should be in most American's minds, and their cost structure can afford it.

      Might put a dent in novelties like the Hummer and Escalade, but otherwise no big deal.

      One thing that interests me is the difference in the car fleet and infrastructure in difference parts of the US. MOre in my next post.

    • A corollary - the rise in fuel prices reduces the value of exurban "macmansions" in two ways:
      the costs of travel by privately-owned vehicle to jobs in the "city" and of heating/cooling both increase substantially. Coupled with rising interest rates, I suspect that there will be a lot of large, expensive white elephants for sale before long.

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