Mirant Corporation (MIR) Message Board

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Gold/Mining/Energy : Mirant Corporation (MIR)

MIR 23.75

-0.9%

Dec 26 9:30 AM EST

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To: Asymmetric who wrote (208)	2/21/2002 4:56:47 PM
From: KyrosL	Read Replies (2) of 903

I think the key effect of the plant sales, the extreme credit tightening in the industry, and general distress of power producers is to abort the headlong rush to a future of extreme power overcapacity. This is the main reason I am buying MIR down here (I bought some preferred today.) The market is treating the IPPs as if they were fiber telecoms. The fact that some of them have fiber optic divisions reinforces the misconception. Although on the surface they appear similar in terms of market exuberance and consequent overinvestment, in fact they are quite different. The key factor in fiber overcapacity has been technology advancement that rendered already laid fiber 10 to 100 times more productive overnight. There is no such technology effect in power plants. Another difference is that the fiber exuberance lasted long enough to seriously overbuild, which combined with technology created enough fiber overcapacity to last a decade or more. In contrast the power plant built up did not last long enough to create serious overcapacity, and I suspect than within three to five years we will back to power shortages, if the current climate persists. Kyros

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