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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: croesus1111 who wrote (22613)	3/10/2005 10:03:36 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 108913

Croesus...re: LNG - Crude Oil - Market Tops etc. There are high profile LNG plays that have caught the speculative move here in Energy/Commodities like Cheniere Energy who's symbol is "LNG"...and it certainly is not "cheap" or undiscovered here; even arguably over-extended given it's parabolic move and perhaps a good short candidate on a pullback. There are conservative plays via the Oil Majors most focused on LNG, some very interesting International Plays and there are other pureplay LNG names under the radar, some small/micro caps and some interesting outside the box developing plays as well. Per the recent CNBC profile; Saudi Prince Alwaleed Bin Talal is making significant investments in Africa...there are still places where you can still be "early to the party" - just stay ahead of the market & outside the box. ...for reasons I will not go into - for now; I will not comment further on specific LNG companies/stocks. However, those LNG plays that are on the "radar screen" and that have become over-extended; I would look to add to on dips; just like I would on many Energy & Commodity stocks ...as they correct from what I believe to be their over-extension here. There are also alternative Energy Plays that become a nice hedge and are perhaps even more levered to further Crude Oil upside than the traditional Oilpatch plays. There is no question that after years of under investment, finally we are seeing a broad cycle shift to hard assets, to commodity's and a broad longterm play with the Modernization & Industrialization of China, India and the developing 3rd World. No one is denying the longterm opportunities this will bring. But, when everyone loads up on the same side of a play ie: Merrill's analytics of 75% of all Institutions being over-weight Energy here & unprecedented Bullish individual investor put:call ratio's...and given the sectors have just had a parabolic move... we've hopefully learned what usually comes next. This is exactly the environment when it becomes imperative that you must "anticipate" the market and when you can least afford to merely "react" to it. History has shown that within Cyclical Sectors these periods are usually followed by violent corrections. And they virtually always occur when investors least expect it, when sentiment AND fundamentals were their most bullish levels and most predictably; when nearly everyone was on the same side of the trade. And quite often when those prolific words - "this time it's different", or New Paradigm Theory's once agin begin to be proffered. - unfortunately; history and experience have shown us that these expansions are rarely without significant corrections and when they reach speculative, if not mania levels... Boom to Bust Cycles occur. China has an almost impossible bull to ride. ...the ride will not be "smooth." The one thing nearly all of us fail to do; is to temper our enthusiam for our rising portfolio's with a duality of both Fear and Respect for Market & Economic History and the EXPERIENCE of the Best & Brightest Financial Minds. We called them relic's, out of touch and slandered them back in the Tech Bubble when they tried to temper our enthusiam and we're begining to do it once again here in Energy and Commodities. ...will we ever learn ? [ let's hope not... because imho; trading the madness of crowds is one of the most profitable trades the market ever offers us non-crowd followers ...vbg] - If Warren Buffett is sitting on $43 Billion in Cash and says he can't find value in this market.... listen to him. - If he is (was) buying a huge hoard of physical Silver...listen to him. - If he is shorting the USD... listen to him. - If Exxon Mobil's CEO warns you about "New Paradigms" and present Oil Prices "NOT" being supported by real world supply and demand levels... listen to him. ...listen to not only "what" they are saying, or doing - but, most importantly listen and learn from the "WHY" of their actions and comments. Few if any are calling for this as "THE" ultimate broad cycle top in Energy, Commodities, or in the China Play. Could it possibly be ? Sure. Regardless, Prudent Money & Profit Management in Cyclicals dictates taking at least partial profits whenever we get one of these parabolic moves.... sell 1/3rd, or 1/2 of your holdings.. raise protective stops, sell some calls, take some profits off of the table and with a portion of the profits; buy some outlying out of the money Leaps/Calls for upside leverage-while limiting downside...whatever fits your needs & style. Just don't end up getting the Rug pulled out from under you when you least expect it and then end up buying dip after dip, after dip...and end up giving much, if not all of it back to ... Mr Market. Cyclicals are called "cyclicals" for a reason. - heed it. And given the unprecedented levels of Liquidity and Debt that have been the Catalyst to the US Economic recovery, the fragility and imbalances of Global Economies, the Chinese Banking System, International Currencies, GeoPolitic's...is the World Economic Stage set for a Correction from merely an over-extended Rally, a Massive Rogue Wave Event Correction; or smooth sailing forward ? ...place your bets.