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

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To: CommanderCricket who wrote (16181)	12/25/2002 11:42:34 AM
From: jim_p	Read Replies (2) of 206085

Michael, I think one of the most important principals of investing is to understand why a stock is trading the way it is. In RRI's case, it a lot easier than most. First mostly institutions and conservative investors owned the former parent company which as we all know was a regulated utility when most invested in the company. Second many of the institutions either can't by their charter (due to the stock price), or don't want to hold the unregulated spin off of CNP. Many of the investors don't understand the unregulated side and won't take the time to see how RRI is different then the others who are either failing or in some cases about to fail. Third, we are at the tail end of tax selling and RRI is not all that liquid right now. And last we have the fear factor with the debt maturities and CA uncertainties after many lost so much money in other unregulated IPP's. We need to keep in mind that RRI will be in the open market buying it's own stock in the first two weeks of January for it's profit sharing plan, and the lack of liquidity works both ways. RRI's plan is to refinance all debt that is due in February, plus all the debt that comes due during 2003 in addition to renewing it's line of credits with the banks all at the same time. Once all the debt that comes due in 2003 is extended, RRI would expect to access the capital markets and retire the debt with a debenture offering at a lower rate. RRI should also get upgraded once all the debt is all renewed. I've been buying RRI on any weakness and not selling on the run ups. I currently have about 40% of my assets in RRI and would not lose sleep going to 100%. The IPP sector has been the worst performing sector in 2002 and will most likely be one of the best performing sectors in 2003 and beyond. RRI is clearly the strongest and most likely to survive in the sector, which is where I want my money. I think it's a gift and many of us will look back and ask ourselves why we didn't buy more when the price was so absurd. Jim

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