I was switching back and forth between Wall Street Weeks and a film on Bravo last night, and may have missed something, but of all the supposedly bright ideas offered by the show I don't think anyone mnetioned energy. And not many people who appear on CNBC mention natural gas as a pure play, even if they mention energy. It looks to me as if we have this all to ourselves. Not to put too much pie in the sky, but that's the way it was with tech stocks in the 1990s. I was intensely interested in tech stocks then, but did not begin to imagine what a bubble they would eventually produce and so I was out many years too soon. To me, natural gas is a lot eaier to understand. It heats homes, makes fertilizer and plastics, generates electricity, and so on, and then it is gone. And more is needed. I never foresaw that millions of people would be buyiung a new computer every two years, but I do understand about the gas.
There are huge amounts of money being transferred into gas producers and pipeline companies, and it seems likely that there could be a lot of consolidation, since they understand how underpriced their own and other companies are. It's a huge opportunity for someone with the right financial connections and managerial skills to create a gas empire out of smaller producers. The money is there now for exploration, development, and new pipelines.
I can see that temporary oversupplies, or the prospect thereof, can quickly lower prices on the futures markets, but the consumption is always there, and growing. Even with a 150% increase in my own last heating bill, I consider the gas a bargain: no dirt, no deliveries, no maintenance, completely reliable.
Well, now let's see what I forgot about. I admit that at one time it seemed crystal clear to me that if gold was selling at $350 and mining companies could produce it for $250, mining companies were cash machines. But gold does not go away and is largely useless. |
