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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Sweet Ol who wrote (3971)	9/5/2001 11:26:43 AM
From: jim_p	Read Replies (3) of 206330

JHR, We are still early in the NG cycle. The perception for NG prices is still bullish short term. As long as perception stays bullish, NG drilling will continue and the bubble will stay inflated. At some point in time after the bubble doesn't go away, perception will shift to the "glut stage" or seventh inning of the cycle. It is this phase which sets up the next up cycle as drilling drops to near zero. It is also this stage which banks throw in the towel and cut borrowing bases and companies like KWK trade down to less than $1.00 per share. This is also the capitulation stage for most NG stocks and allow for the type of buys we saw in 1999. If the low prices persist for more than 12 months, companies like KWK will be owned by the bond holders and the common shareholders will get 1-3% of the equity in the company in some form of reorganization. Well permits are still on the rise. High activity is not bullish for the current NG cycle. Things will get worse as long as perception is still bullish. Hold on to your shorts and add on any rallies like we saw yesterday in KWK. There is still lots of money to be made on the short side. I would not be to eager to take profits. Jim

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