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

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To: Gottfried who wrote (6380)	1/31/2002 11:18:15 PM
From: jim_p	Read Replies (2) of 206087

Gottfried, It's a catch 22 for the power generators. The market is now softening in term of both growth and operating margins. Most have huge capital commitments at a time when assess to capital is almost gone. On top of that, potential losses from both CA and ENE have not been recognized from what I can see. These are big numbers which in some cases exceed their capital. Now that the rating agencies downgraded the weak players that were over leveraged, their access to capital is both limited and a lot more expensive almost assuring failure for some. The sector will soon need consolidation and some may not survive. CPN is the one most mentioned here in Houston as one who will most likely not make it, but MIR is not much better off. Look hard at MIR earnings last Q. Gains from derivatives made up more that 100% of the income. I know they looks very cheap, but there is good reason. All I can say is read the footnotes carefully before buying. Good luck, Jim

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