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Linn Energy, LLC Message Board

  • jackhiller@ymail.com jackhiller Jul 21, 2010 9:22 PM Flag

    The Motley Fool proves its name

    Check out the Fool's analysis from this evening. It wonderfully well supports the point that of few of us make about the typical shallow, even ignorant, analysts who post advice to the detriment of the "ordinary" investor.

    Perhaps the biggest illustration of ignorance is what they did not report about Chesapeake's late-to-the-party recent strategy of seeking oil laiden properties as the NG markets face potential oversupply now that horizontal drilling with fracing technologies will increase potential supply--while oil resources worldwide continue to diminish or cost much more to find, drill, and transport to markets.

    Chesapeake is yet almost a pure NG play as the Fool notes, while LINN is about half and half. The Fool shows no regognition of this advantage for LINN.

    And then there is the matter of operating profit. The Fool makes no mention of LINN's multi-year herdging program that produces substantial operating cash flow for low-cost production. Instead, they are snookered by the MLP accounting with depletion that creates low reported profit for the tax accounting book.

    And too there is the matter of equating LINN's status as an LLC with KMP as an equivalent MLP--dead wrong. Kinder has recently been reported to have reached a stage where the manager is going to be soaking up future profits at the expense of ordinary unity holders. Linn of course as an LLC has no management component that creates an adversary relationship with its ordinary unit holders, as does the MLPs, specifically to include Kinder.

    The Fool is more of an "idiot" in providing investment advice. In fact, they seem not to appreciate their own flock who rate LINN highly despite their own less favorable analysis. You might think this discrepancy would have stimulated them to do a deeper analysis, but Motely proves itself the fool.

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