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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Scott Mc who wrote (8181)	4/24/2001 5:33:04 PM
From: stan_hughes	Read Replies (2) \| Respond to of 24927

Scott - I hear you, but unless you have significant exposure and also believe that equities have not already priced in somewhat of a future decline in energy prices, I think you would find the cost of hedging prohibitive. I also think hedging is of questionable value right now, and here's why. NG is in a multi-year uptrend and has already stabilized around $US 5, and will probably head higher from here. Given OPEC's newfound resolve and a likely shallow US recession, I'm not terribly uncomfortable with where oil is currently trading at either, although geopolitical considerations are always difficult to predict. Overall therefore, I don't see a great deal of commodity risk at the moment in the energy play specifically. I'd be more nervous if the stocks were trading at historical premiums, yet the opposite is in effect, especially those in the Canadian industry. In that context I therefore feel quite hedged already, hence my previous comment to Richard that I believe a cushion is in place if the fundamental picture starts to weaken for some unforeseen reason. Quite frankly, I actually think the biggest mistake to be made right now is dwelling on the way the previous cycle played out, and thereby possibly spooking yourself into getting out too early. This boom came on so fast that half the patch is still looking for the bogeyman under the bed that came out and bit them on the butt last time. I honestly don't believe we've seen the big move up yet. BTW if you want to monitor energy futures on a regular basis this is a good link, and although it's delayed 20 minutes, it refreshes automatically throughout the day. I just leave the window open on my desktop and peek at it from time to time to make sure I'm not trading against myself. quotes.ino.com