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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (9856)	2/2/2000 11:33:00 PM
From: Michael Burry	Respond to of 78550

"Hard to make investments if one is standing in qucksand." Yet, over time, they do.

To: Madharry who wrote (9856)	2/3/2000 6:58:00 PM
From: Archie Meeties	Respond to of 78550

Armin, I've recently been reluctant to suggest or invest in E&P's balanced toward oil because of that very reason. The case for natural gas, from a value stance, is far more compelling. Not only is there no cartel, there is no strategic ng reserve. There are clear reasons why ng should and will be the hydrocarbon of choice in the next decade. There are, I believe, environmental arguments that ng should be priced at a premium to oil. Currently, on a BTU to BTU basis, ng sells for a significant discount to oil. While there is no counter argument to the idea that low cost producers (OPEC) control oil prices by impacting marginal supply, there are very good arguments that these nations desire oil to remain high. The primary argument is; A barrel of oil sold from Arabia not only must pay for lifting, administrative, and oil infrastructure costs, but it is also the primary revenue stream for these governments. So while a US company can be profitable at, say $14 oil, an OPEC nation may need or desire a higher price to finance its health care system, maintain its infrastructure, and do all those things that our government does through taxes. Simmons has calculated the price of oil necessary for economic health in most OPEC nations to be around $20. While we're on the topic of commodities, anybody interested in Silver?