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To: Sober who wrote (48443)	9/19/2006 2:21:07 AM
From: Skywatcher	Respond to of 118717

Speaking of bad gas, this hedge fund & their 'investors' took the pipe>> This morning's news about Amaranth Advisors' catastrophic natural gas losses is probably the most shocking thing I've read in my career. Evidently the firm, one of the largest hedge-fund operators around, took a huge bath in natural gas that caused its performance to go from, according to published reports, up almost 30 percent at the end of August to possibly down more than 35 percent year-to-date. This would be shocking enough for a small fund, but is particularly astonishing for a huge firm (assets reportedly near $10 billion) and one whose expertise has been in very different areas. One has to assume that a large part of last week's natural-gas losses were triggered by forced Amaranth sales made to meet margin calls. Nick Maounis, who founded and runs Amaranth, is a convertible-bond guy and a very good one. He got started in the mid-1980s on a small proprietary trading desk and went to Paloma Partners, a dominant hedge-fund family specializing in convertibles, several years later. In 2000 he spun off Amaranth from Paloma and had grown the firm spectacularly up until this remarkable setback. Maounis is known, among other things, for the annual Final-Four party he holds at his Greenwich mansion. It's likely that Amaranth's great success earlier in the year was largely attributable to the great turnaround in the convertible-bond market. Convertible-arbitrage funds had their worst showing in decades in 2005, with the best-performing funds showing losses in the mid-to-high single digits and many funds doing significantly worse. It's estimated that between one-third and one-half, if not more, of convertible-arbitrage funds shut down last year as investors ran from the strategy despite its outstanding historical performance. Your correspondent ran one of the funds that closed. Multi-strategy funds such as Amaranth were better positioned to weather the losses in convertibles (because other strategies offset the damage) and thus avoided massive investor redemptions. These funds bought during the going-out-of-business sales held by funds like mine and profited from the turnaround this year. Investors such as Amaranth who recognized the value in convertibles, rather than momentum-driven players who ran for the hills as things cheapened, benefited from the reversal in sentiment this year. Amaranth's history as a disciplined relative-value firm makes today's news all the more shocking. Amaranth's Impact What are the short-term consequences of Amaranth's massive losses? First, one would be inclined to play for a short-term turnaround in natural gas, as last week's sell-off almost had to be grossly exaggerated by an Amaranth liquidation. When traders are confronted with huge sellers insensitive to price, they typically get partially run over and then limp out of the way until the seller is gone. This makes the end of the sell-off the ugliest, since it becomes difficult to find bids at almost any level, but it almost makes the last buyers by far the most successful ones. Stocks sensitive to natural gas should also benefit, since we now have important data suggesting that at least part of the recent sell-off was purely technical. At the risk of sounding like a broken record, and with full disclosure of my holdings, Devon Energy ( DVN: View sentiment for DVNsentiment, chart, options) offers a play on both a gas turnaround and the recent huge discovery in the Gulf of Mexico. As far as Amaranth is concerned, one must wonder what is going to happen with the firm. Doubtless the convertible market is watching closely for signs of selling activity in issues in which Amaranth held large positions. Because of Amaranth's size, almost any issue they were involved in, they were big in. Since convertibles have done so well this year, it's likely this will cause some investors to take some profits out of concern that a large player may be permanently exiting the market. Still, it's unlikely that whatever happens with Amaranth will have more than a relatively short-term impact on the market. Bill Feingold (bfeingold@sir-inc.com)

To: Sober who wrote (48443)	9/19/2006 9:59:22 AM
From: Brinks	Respond to of 118717

DPTR Delta Petroleum First Newsletter Recommendation I've known newsletter writer Ron Struthers for more than ten years. His claim to fame is he picked Ultra Petroleum at approximately $ 1.00 after the Bruners were thrown out and it is still to this day in his newsletter portfolio. Quite an achievement !!!! Not just purchasing it but holding it for the big pay day. Chart in which Struthers has participated in: finance.yahoo.com Ron has an excellent newsletter that covers the junior metal companies and oil and gas juniors. First Newsletter Recommendation of Delta Ron Struthers here: playstocks.net