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  • lner2512 lner2512 Feb 18, 2011 2:39 AM Flag

    "Lost Decade"

    I saw the CNBC show. I have a problem with the shorts' assumption that this country will refuse to use cheap, plentiful energy, especially when it means more jobs and less in oil imports.

    Morningstar, a pretty conservative shop, values RRC at $86...

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    • Been doing this professionally for 10 years...with success. I'm not calling my self an expert as no one is ever an "expert". Most really good managers are right not much more than 50% of the time but they manage gains and losses VERY effectively. They also know how to spot trends and quickly admit when their positions or ideas are wrong and change direction. These are all valuable skills to success.

      The reason I say that is this:

      Do NOT listen to Kramer, Morningstar or even me!! Watch the market prices, trends, relative strength for yourself. Most glorified 'experts' are backward thinking. The market has not fully embraced the NG situation. That's why you have 'experts' predicting price bottoms weekly and stupid valuations on stocks as if NG is going back to 6+....all the while NG is going down persistantly. Read UPL's report....more production. EVERY MAJOR IS DRILLING MORE SHALE NG. People production is up approx 25% YOY and rig count now is even higher! Think people...eventually the NG companies will be forced to stop drilling. I was following the markets in 98-99 when NG got down in ths 1s to 2s area because supply was ridiculous. I would argue that conditions are now worse because the supply is in place, cheap and accessable on a long-term basis! IP rates for shale NG wells are very high. That means supply response is very fast.

      I'll now quit trying to lay out a logical debate supported by the charts. Investors in these primary shale NG producers can hold and hope. But ask yourself why the energy sector is on a tear, crude is over 100 (except WTI) and these shale NG producing stocks are acting like dogs. Wait until the liquidity tide comes in or there's a sentiment change.

      • 1 Reply to velocity_capital
      • Obviously this is a great market battleground, velocity. I can't imagine a more complex issue, in that it isn't just exploration companies in competition with each other. Its the various energy sources, some of which are new, some mature like NG, and some decrepit and diminishing. So I can see the confusion being rampant for quite a while here. Especially in the void of a strong national energy policy in this country in spite of the threat that global disruptions pose. Its actually irresponsible in my mind to dally with healthcare as the main agenda in congress when energy is so important financially and with respect to security.

        The point I will make though, is, as I've said before, once the country gets around to making a policy, NG is obviously the only way to go for economy, cleanliness, and national security. If we had started a pro-NG policy 5 years ago when it was becoming apparent what fracturing was doing to our gas supply, we would have stopped wind, solar, nuclear in their tracks. But as much as congress wants to drag its feet, and then march only to the beat of big oil and coal's drums, the inevitable outcome is still a heavy reliance on NG. The industry is slowly installing the pipelines to get ready. But once the move gets to be a real push, (say, if a world disturbance drives oil back to $200 and it stays there, or just inflation drives oil in this country to $200) then pipelines will be laid faster, and suddenly they will be pushing for even heavier drilling. NG is almost as bad as electricity when it comes to needing a continual supply. It just isn't something that can be stored easily, but needs to always be flowing - right amounts, right directions.
        Well, that's all the future. The price could go to $2 in the meantime. That's the issue. We'll just have to see. I still totally agree that its the SEASON to short. I just want to pick the companies carefully.

 
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