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

To: CommanderCricket who wrote (93801)	11/20/2007 11:08:42 AM
From: Umunhum	Read Replies (3) \| Respond to of 206093

Now is the time to deploy some capital for the heating season. Shoulder season is officially over this week. Oil has risen significantly over the last few months: futuresource.quote.com And yet the XOI has done very little: stockcharts.com Oil is up over 40% from its August lows. An equivalent performance for the XOI would put it around 1760. I don’t think this disparity can continue much longer. Especially in light of my belief that oil prices are heading significantly higher. So the next question is how do you play this? I know that many on the board here like the COS junior companies. And I believe there is merit to that strategy. However, I still favor multi-billion dollar companies with current production and the financial wherewithal to implement their business strategy. I am up to my gills in COSWF, SU, CNQ, ECA, NXY and PWE. NXY has been a laggard and has some catching up to do. So I picked up another 12,500 shares. I also purchase 30,000 shares of TLM. If it’s good enough for T Boone, it’s good enough for me. TLM's latest investor presentation forecasts production growth for the next several years sealed the deal for me. That and I read a CIBC report projecting $5.46 of cash flow for 2008 based on $68 oil. TLM’s production is approximately 60% oil and so I wonder what their cash flow will be based on $100 oil. I think they are currently selling for significantly less than 3 times 2008 cash flow.

To: CommanderCricket who wrote (93801)	11/20/2007 8:18:44 PM
From: ChanceIs	Read Replies (1) \| Respond to of 206093

CL tags $98.56 AH. Article below on option time decay over the long weekend - nothing you already don't know. I sold my $80s for $0.90. I will be honest and say I regret it in the face of $100 CL. Still if I have to buy them back for $5.00 later in December to sell the Jan for $1 more and hand Uncle Sam the loss from $0.90 to $5, I will consider it an early visit from Santa. This market business is not for manic depressives - you get resonant coupling. A month ago I was upset because my CNQs had run far into the money. Then I felt smart because it tanked. Late last week I felt a fool for not closing the position to save on some taxes this year. For a $30 gain (about 37%) for my CNQ holdings one pays a roughly $10 ST capital gains tax. Instead, I watched the thing drop $10 in market value. I won't cry if those puppies get called away at $80. I have said that before. ___________________________________________________________ Stay Away From Time Decay IF YOU LOOK AROUND THE POKER table and can't figure out who the fool is, it's probably you. The same principle applies to options trading, especially around the holidays. If you look around the market and think hoards of options contracts seem to be priced extremely low, you're right. But you're also wrong as you've stumbled into one of the great trading traps of the options market. Market makers regularly lower options prices ahead of holidays and long weekends in the hope that some investors will buy the contracts, thereby taking on the so-called time decay that would otherwise cost market makers lots of money. When the holiday is over, the prices of the options tend to be readjusted to a higher price. Options, unlike stocks, are what are known as "wasting assets." This fancy phrase means that options lose a little bit of value as each day approaches toward the contract's expiration date. Market makers know this, of course, and try to get someone else to pass off the time decay to someone else. For most investors, time decay of options is not a super big deal, but for larger traders such as market makers and others who have to maintain many sizable options positions, time decay can cost them hundreds of thousands of dollars over a long weekend. The natural question is how investors can make money if they know this is how the market makers will price options before a long weekend. (The options market is closed Thursday for Thanksgiving and reopens for a half day of trading on Friday.) The answer: not very easily to not at all. If anything, time decay is one reason why so many investors, individual and institutional, like to sell options. They would rather keep the time decay firmly in the court of market makers. Of course, selling options ahead of long weekends, or holidays, seems to make intuitive sense, but be careful because prices have a way of changing when the market reopens.