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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (14769)	11/10/2002 10:28:41 AM
From: quehubo	Read Replies (1) \| Respond to of 206097

Yes, I believe the statistics and I routinely have everything I own plus options and margin into NG related stocks. Since my wife and I are employed, we spend below our means, we have another 15-20 years before early retirement, and I keep six months cash out of my trading accounts I am not risking immediate dire straights if I bet wrong in NG cyclical stocks. The immediate weather seems to becoming bearish, the market looks to have already priced in all the bullish news of the week. The great unknown here is what happens to oil if Iraq is quickly conquered, the oil fields are not damaged and Iraq's capacity to export is maxed promptly at 2 mbpd. I am not sure what it is, but I suspect it would average 1.5mbpd more than what is has in the last year. I suspect OPEC could cope with this, and Russia, Mexico and Norway would all be drawn together to support oil prices. But in the mean time I do not want to be max leveraged into NG related service stocks and have this and other bearish issues occur. I suspect the NG story will be full in force by this February, NG storage dropping quickly towards <900 bcf, Canada suffering equally, drilling ramping up hard, etc. By this time we should be ready to enter Iraq if Saddam does not manage to avoid his destruction at our hands.

To: Tommaso who wrote (14769)	11/11/2002 12:54:24 AM
From: energyplay	Read Replies (1) \| Respond to of 206097

Possible NG downsides - I can see a few other low probability downssides for NG - 1) Government price controls. Price was controled and the past could happen. Richard Nixon, Republican president, implemented a wage and price freeze about a year afer the US closed the gold window. Probality maybe less than 2%. Most likely to happen after prices RISE. 2) Big discovery like Ladyfern. Hard to argue with this, since Ladyfern jsut happened - it's not 50 + years ago like East Texas. Offshore Nova Scotia may be the proximate threat - it's near consumers, may be really BIG. Mackenize River won't have a pipeline unitl 2008, earliest. Upstate New York area could be another discovery area which could be brought on quickly. 3) production improvements - The other threats of rapidly increased production could be -Coal Bed Methane, which is under extensive development at this time, especailly in Wyoming. Multiple pipelines are being built to handle the gas, and more are planned. Improvements to fracing the Barnett Shale. The recovery of gas from Barnett shale seems to improve about 10-20% a year. There could be a breakthrough that increases initial production rates maybe 2x. Since this would also change the economics of drilling, we would see much more drilling in the Barnett. 4) Really nasty recession/ depression - I give this maybe a 5% probability. 5) Really warm winter - Probably less taht 3% at this point. Any comments on probablity of the above events would be appreciated.