showdown, page-12

Joker1 re: showdown
Joker1 - I am an avid chartist and HDR is one of my old favourites. I have often traded HDR but of late have determined to stick it out for the long run (with the minor portfolio adjustments of course).

As with many explorers, HDR is a stock which presents opportunities prior to drilling or even better, before a drilling campaign. The best opportunities to purchase HDR in my experience, have been to pick up shares on drilling dissappointments (i.e dry wells -Courbine, or less than anticipated strikes - Banda) [or if you were lucky enough, when HDR was 7c]. Invariably, these trades can yield 10-20% returns if your market timing is spot on. Otherwise, the returns are much less and could result in losses. The most dangerous times to hold HDR would be just prior to and after drilling results are annouced and it is at these times that HDR's price gyrates wildly as traders sell out on disspointment or buying eagerly on a good find (Chinguetti -1).

Having said all that, I now view HDR as a entire different stock to the other ones in my portfolio (incl NCP, MIG, MAP and ION). I would be much more prepared to take profits on the these stocks as I would with HDR. With every exploratory well, HDR stands to increase by 30-40% or drop by 20-30%. Viewed in this light, it is quite a dangerous stock in the short term. However, I have sufficient confidence in HDR that in the long term, i.e. after 5 to 10 exploratory wells (and eventually production by 2005), the odds of substantial returns ( in the region of 300 - 500%) increases many fold. In addition, a takeover offer to HDR could come at ANY TIME. Hence I am prepared to hold on and therefore view each dip as buying opportnities. This strategy could be suitable in the short term, but it all depends on your perspective.

Hope that helped.