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Strategies & Market Trends : Value Investing

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To: Bordeauxman who wrote (40468)	12/8/2010 11:49:38 AM
From: E_K_S	Read Replies (1) of 78594

Hi Bordeauxman - The key is to buy value when everybody is selling. The company has been quite successful with their other properties developing working wells that are now generating revenues for the company. gastar.com From their Web site:"...Gastar has significant strategic acreage in some of the most successful and richest gas production areas in the United States, including the Deep Bossier Sands/Knowles Limestone play in East Texas, the developing Marcellus Shale play in Appalachia and Wyoming's Powder River Basin. Gastar recently completed the sale of its assets in the Gunnedah Basin of southeastern Australia....". There was a small set back in losing a court judgment which cost them $24 million to settle but with the current stock sale, the proceeds cover this and the additional monies needed to pay off their new Marcellus Shale property leases. Here is the way I look at it. The value is in the ground and I expect oil & natural gas to maintain their value even as the $US debases it's currency. The assets are located inside the U.S. and not subject to other political influence. Management has a pretty good track record to develop working wells too. I have been using a strategy of hedging my small position by selling covered calls on a portion of my shares on prices above $5.00/share. This (mentally) helps me protect the downside and since my buys are small (compared to my total portfolio), I feel comfortable buying more shares at the current level. It's possible the current sell off may take this stock below $4.00/share, where I will probably add to my current position(s) (11/17 $4.17.share & 12/08 $4.06/share; sold 25% March $5.00 Calls at $0.85/share). I think in 3-5 years, this is a $15.00/share stock. Even more important, I now own hard assets "in the ground" with this company that complements my other natural resource stocks, gold & silver coins and other hard assets that hold their intrinsic value. Long term, I am much more concerned about the value of the U.S. dollar and just what my purchasing power will be. $100 dollars for a loaf of bread or 1 share of GST? EKS FWIW - Did you notice that both Gold & Silver hit new all time highs this week? Not good . . . .

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