Kastel - Yes, I've seen that table, and I'd guess we've both probably seen most of the debate about the dangers in using historical figures, albeit accurate ones, in making forecasts going forward in a changed world. Nevertheless, I have no doubt that NG traders are keying off those numbers and that's why they've taken the complex down a few notches.
That's really my point - the data looks bearish short term but this isn't a short term game. I don't think supply is going to come out of the middle of nowhere now at $4 that wouldn't have been sold last winter at $10, so I'm looking at this current weakness as the bottom of the trough. IMO the "big build" risk is already priced in - change the sentiment and watch out for the whipsaw.
Even if NG remains weaker than my expectations, most producers are still making good money here, and I agree that hedgers will do even better and should outperform in that environment. To cover that one off, I'm still holding 11,000 PWI, even though my gut tells me to put it more at risk by increasing my E&P positions. At the end of the day, I think I'll make decent money on both.
Always found GOU a bit pricey myself, but that's the takeover premium kicking in. I no longer hold NCF for reasons I've posted on this thread that you can look up if you're interested. Otherwise I love the Canadian energy play, much better values than the US and which helps cover the downside risk. I've been taken out of most of my juniors now because of acquisitions, so I've just been accumulating the later cycle service stocks, and trading in and out of the larger cap Canadian E&Ps (AEC, AXL, HTR, etc.) based on their technicals.
Keeps me out of the pool hall. More importantly, it distracts me from possibly getting stuck on that tech flypaper, which common sense tells me to avoid here. Sounds like you're essentially into the same kind of stuff. May we both be gloriously successful and retire to Fiji where NG forecasting talents are not required. |
