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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks

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To: russet who wrote (1597)	10/3/2001 9:38:28 AM
From: stan_hughes	Read Replies (2) of 11633

russett - A few final comments and then I'll move on. 1. At any given point in time, X number of wells need or could use some rework. But I don't believe you will gain much insight into overall gas supply conditions speculating whether the value of X is higher or lower than it was in the past. There isn't enough data to draw any conclusions. 2. There never was a "gas production spike" but there was a gas price spike, one that was largely caused by administrative farkups by Californian gas procurers caught asleep at the switch last winter. In truth, the fact that production didn't appreciably increase quickly in the US was the cause of much consternation a few months ago, because most people expected that it would. That prices would still fall in the face of an anemic supply response reveals that the price spike issue was rooted in the demand side of the equation, i.e. the California situation. With equilibrium restored however, the industry immediately faced ironically the precise opposite challenge, a sharp decline in demand. Storage activities have picked up a lot of the slack on the way down but soon we will hit the brick wall of having no more storage space. That's when the fur is really going to fly. 3. As for the analysts of this world - it is of little importance to me or most investors that the trusts may have outperformed index X, Y or Z in the past. Some people might even argue this predicts that trusts should now underperform in order to return to the mean. IMO, the whole discussion is all so much rearview mirror BS. All I care about is where they're headed now, as you should be. 4. The number of producers willing to sell gas at a dollar would obviously be quite high if the alternative was no sales gas at all, so just remember price is relative. IMO you haven't seen just how self-sacrificing companies can get when too much production is competing for not enough consumption, especially when the buyers are sitting on historically high storage volumes and would like to recover some of the dough they got pinched for last winter. Business is business. 5. I hope you have a more concrete vision of long term gas supply dynamics than praying for cool weekends in October. I also hope you're not one of the people clinging to the faint hope of some kind of magical turnaround to yesteryear in industry fundamentals, because IMO you're going to be sorely disppointed for a considerable length of time. 6. One thing we do agree on - I'll be letting the market be the judge of whether I'm too much of a pessimist right now. I would equally and respectfully suggest you take off the blinders for a few hours and ask yourself whether you're being an emotionally driven NG optimist. No matter what happens, good trading to us both.

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