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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (19012)	2/26/2003 12:54:10 AM
From: energyplay	Respond to of 23153

dabum - good questions. If this was a software company, there would be the risk that some sales would be pushed into next quarter. Being E&P, it still has some risks - 1) Sudden problem with production not too likely since CRK has many wells. This can apply to micro stocks like ROYL and BEXP 2) Selling at the wrong price Easy to do through bad hedges - BR did this, missed their quarter estimate by 2 pennies, knocked 20% off the stock in 3 days. Ohter way is to be on the wrong end of a pipeline squeeze - Lots of Wyoming Coal Bed methane producers making pipelines richer when the pipelines get 40% of the price. CRK is unhedged, so should avoid most of this 3) Pay too much for overhead and management or drilling services. The drilling service pruice explosion hasn't happend yet - soon, but not this quarter. OXY prime example of overpaid management. 4) But something bad, overpay, or that won't pay off until 2006 That's a real risk. Production X price = gross revenue at high margin. If they don't mess that up, or buy something dumb, there will be huge cash flow. Is it priced in yet ? I don't think the over $5.00 price is in any of the E&Ps yet - they are just a little above previous highs in the fall, when there was expectation of a warm winter. I guess I'm willing to take a bigger risk for a bigger bang. I also seen that on strong fundamental driven stocks, the T/A sometimes doesn't look good. Often it gets better before they ramp, sometimes not.

To: chowder who wrote (19012)	2/26/2003 12:59:53 AM
From: energyplay	Read Replies (1) \| Respond to of 23153

dabum - are you using your whole portfolio or a big chunk of it to get 20% from a few 8% gains ? Or are you running a bunch of trades ? I try to have under 25 positions, and none starting with more than 10%, unless it's a bond fund. Will let positions run almost sky high if they keep looking good. Usually don't have positions samller than 2% , unless very specutalive like an option or microcap, an experiement, or waiting to long term gains in a taxable account.