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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Sharp_End_Of_Drill who wrote (73945)	9/20/2000 12:50:07 PM
From: Meridian	Respond to of 95453

It's my understanding that ENE is neither long nor short natural gas. They simply charge a spread on arbitrage. They arb coal, gas, gasoline, oil, heating oil and electricity. They make money when these commodities are volatile, not necessarily when they move up or down. And I think they have to mark to market every day. At least I did when I traded commodities.

To: Sharp_End_Of_Drill who wrote (73945)	9/20/2000 1:11:42 PM
From: Heretic	Read Replies (1) \| Respond to of 95453

>>I would be very careful thinking about shorting ENE<< So true. Anybody know what is the largest internet marketplace on the planet? EnronOnline. A beautiful irony in the debate of the 'old economy' vs. the 'new economy' is that ENERGY trading online is HUGE... Enron is also ontrack to become the world's largest buyer and seller of bandwidth. HUGE... Enron has successfully managed their energy trading for a very long time and have are renown in their ability to hedge their exposure. (The fact that they also control the transmission of energy through their pipes doesn't hurt, either. <g>)

To: Sharp_End_Of_Drill who wrote (73945)	9/20/2000 1:30:37 PM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

sharp end of the drill re: GOS acctg in Energy trading .... sorry you took such a simplistic interpretation of that. No one is comparing thier business fundamentals to the Sub Prime lenders and the subprime lenders did NOT lose money - they made huge, huge profits that outperfomed the best of all financial stocks - but; they collapsed because of the gain on sale accounting methods did not reflect the real financial health of the business and greatly exaggerated reality. The same "GOS/gain on sale" accounting method - will also greatly distory the reality of these new paradigm trading revenue & earnings models - much of the recent price movement of these companies has been based on the expectations in the "trading" area's versus the traditional business. I wouldn't be a shorter of them here; but if we get any "weather related" Nat Gas spike that in turn drives up these co's - oh yes; their short's. ENE has continually been talked about as overvalued based on this Internet Age/New Paradigm commodity trading valuation... No one speaks negatively about the quality management, their execution; nor even the potential of the trading business; it's merely the valuation assigned to this portion of the model & the valuations of "that" portion of the business are based on bad accounting models... I guess we shall see.