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The chemical business is very cyclical - an we have been in the down portion of the cycle for awhile now. Overcapacity in many sectors --- except for certain specialty products makes investing in chemicals a turnaround approach. The exceptions are catalysts - which tend to be counter cyclical and also benefit from higher oil prices - and the silica/wafer group. The engineering and construction group is also going great guns - speculation on more power plants and oil refinery capacity.

However, if you want to make money investing in chemicals you have to buy when no one wants to touch chemicals - so there should be a buying opportunity when the lows are tested again this summer. Just remember to sell when everyone says to buy the group.

I think we're in for more interesting times in the industry - there has been alot of repositioning of chemical companies over the past few years - going into specialty markets - selling their chemical business altogether - just seems like you can't predict what any company is going to do - well except for Dow, the big just keep getting bigger.

Good luck and do well
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