Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Ramsey Su who wrote (49124)	4/29/2004 10:16:59 PM
From: energyplay	Read Replies (2) of 74559

Hi Ramsey - I think A G KBE wants the Federal government to make it easier to build more LNG terminals, and decide what trade off of NG drilling vs. coal it wants. I would buy natural gas. I would not get an adjustable rate mortgage...;-) I would buy NG in the form of royalty trusts and some smaller E&Ps who are growing reserves. Futures will be erratic and subject to hedge fund games. (like the price of silver has been the past year) Some of the roylaty trusts have great tax advantages. In order of preference - Buy TMR - consider going heavy on this. I expect a big move this year, aobut 50%. You will need to re evaluate in Jan 2005 - might want to hold this for a number of years. Great value play Buy some KCS and BEXP for about the same time period Royalty trusts Buy SJT for long term hold Buy DOM for a one year hold - 1/2 position Buy some (2 or more) Canadians, like Accliam AE, Paramount PMT, Vermillion VMT, Advantage AVN. The distribution yield on these is pretty high. For taxable accounts, Acclaim's return for much of this year should be classified as return of capital and tax free. If you can only buy one or two, consider TMR and Paramount. Paramount does have a little downside risk, but also upside potential and 15% distribution. ************** The supply / demand case for NG is getting stronger. I expect we may see a huge increase (like a ramp up)over the summer, aided by hedge funds piling in, followed by a dip in the fall if the first part of winter could be warm. This roller coaster could be like what we have seen in the price of gold and copper. Stock prices will follow. Long term outlook will be positive, but you may not want to hold through the dip after the ramp up. How hot was it in San Diego ?

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