Forget Europe: Market Pros Say It's Time To Buy U.S. Stocks

[Myth465]

People have been calling a bottom in Nat Gas for 4 years, or so. I predict as I have predicted for a while, that Nat Gas continues to be a dog. We just have endless supplies of it coming online. Even those oil wells in many of the new plays, have significant gas production. The gas aint getting flared off, and will continue to be brought on. Buy gas attached to oil reserves, get the gas for free. Buying pure gas inmo is gambling. Not too many people are making money at less than $3 an MCF. I still own SD and CHK, but for the oil potential. The gas is the kicker. Banning fracing would bring things into line, but you would have to own an offshore or conventional producer.

 

CHK has single-handedly screwed up the economics of the natural gas market. They may do the same for liquids, but cant touch oil...

[txlaw]

With nat gas I will be looking at coventional producers in Western Can, and the US rockies.  The whole business of fracking makes me nervous.  I can see many local governments shutting it down due to local political pressures.  There is also the issue of water contamination, and possible links to Earthquakes.  If a major aquifer is poisoned, or an Earthquake related to fracking causes significant urban damage we could be looking at the biggest lawsuits in history.  Exploding rock deep underground cant be safe no matter what anyone attests.

 

This is my biggest worry with the US nat gas industry.

 

I hope that the fears about water contamination and earthquakes are overblown, but I wonder whether the industry is simply sitting on (or ignoring) information about the negative effects of fracking, similar to how the tobacco industry acted when people first started to realize that cigarettes caused lung cancer.

 

Having said the above, I don't see how we can ignore this resource that we must use as a bridge to get to a cleaner energy future, and that will change world geopolitics for the better.  There will need to be more involvement from the federal government -- perhaps there should be stricter rules on collecting data on these problems, and there ought to be a federal insurance fund that all nat gas producers pay into that can be tapped when environmental problems occur.

 

Nat gas is a long term play -- one has to be able to outlast the short term pain that could very well continue for a while.  Wouldn't make it a large port of my portfolio yet. 

[Cardboard]

"We haven't gone totally defensive or anything.  We are still very much long our U.S. financials, but certain other investments continue to rise where we have and will continue to take small profits from.  As well, things like Winn-Dixie were bought out."

 

Well Sanjeev, it sounds like you had better luck than I did in 2011. It seems that my stocks all went up a little bit at a time, then all went down a fair bit. Now, they are all going up a little again. The high correlation thing I guess. I wish I could take some profits, but none seems to deviate enough from the rest or to get close enough to fair value for me to let go. It is a real pain, since you never have "new" cash to reinvest in new opportunities and to cristalize some advance. Same with takeovers. Each year I would see one or two, last year none.

 

I guess that I could voluntarily raise cash, but it just doesn't seem to make much sense since it is selling underpriced marchandise in the hope of buying it back or something else cheaper.

 

Cardboard

[Parsad]

"We haven't gone totally defensive or anything.  We are still very much long our U.S. financials, but certain other investments continue to rise where we have and will continue to take small profits from.  As well, things like Winn-Dixie were bought out."

 

Well Sanjeev, it sounds like you had better luck than I did in 2011. It seems that my stocks all went up a little bit at a time, then all went down a fair bit. Now, they are all going up a little again. The high correlation thing I guess. I wish I could take some profits, but none seems to deviate enough from the rest or to get close enough to fair value for me to let go. It is a real pain, since you never have "new" cash to reinvest in new opportunities and to cristalize some advance. Same with takeovers. Each year I would see one or two, last year none.

 

I guess that I could voluntarily raise cash, but it just doesn't seem to make much sense since it is selling underpriced marchandise in the hope of buying it back or something else cheaper.

 

Cardboard

 

No Cardboard, we took a small hit in 2011...early into financials and Overstock hurt us with their problems.  But we've recovered alot in the first couple of weeks of 2012, and we were fortunate with a couple of other investments like Winn-Dixie, and some newer positions we added that went up significantly.  Cheers!