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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (46439)	2/3/2012 9:27:01 AM
From: NikhilJog	Respond to of 79051

madharry - do you have the link to the letter?

To: Madharry who wrote (46439)	2/3/2012 10:11:13 AM
From: Spekulatius	2 Recommendations Read Replies (4) \| Respond to of 79051

re Longleaf funds and Chesapeak. For every buyer there is a seller. These guys have a 7.7% position as of 12/31/12, which is going to hurt. Concentrated funds owning a loosing position may at some point sell out and then you get your CHK really cheap. CHK valuation metrics in terms of proved reserves are similar to BBG and UPL which have none of the conflict of interest issues that CHK has, and are low cost operators. The latter both have negative cash flows as well, but I think their management will come to their senses much quicker than CHK's where Audrey get's a cut of the cash flow for every well that CHK drills. Why would he stop? It will work for him, NG prices and shares prices be dammed. Incentives rule and CHK incentives are heavily skewed towards increasing production, not earnings or shareholder value.