richjoy

Chesapeake Energy Called the Market's Bluff

p.s. No one here is going to change their opinion of BO or JM because of some comment they read here...please keep this to CHK (or XTO).

Chesapeake Energy Called the Market's Bluff

Investing is about timing!...or the time value of money!

What good is it to invest in CHK (for example) if it is dead money for 3 years, than doubles in the next 5?...which means it took 8 years to double! Chances are, it is very likely you or I would tire of it and sell at no gain in less than those first 3 years.

Give me a stock that will grow by about 15% per year.

Most of us don't need 'home runs'; we need good sleep-at-night steady performers. (If you don't believe me--just look the turnover in your portfolio!)

Chesapeake Energy: Truckin', Like the Do-Dah Man

I own CHK, I want to own a bit more (but not too large a % of portfolio) because I think CHK is among the best natural gas stocks at a time when demand for NG is increasing. I don't mind contrary opinions, and have no intention of getting into a pissing match over CHK.

Petrohawk and Chesapeake Fly on Haynesville Shale News

There are many good NG investments (and oil investments also).

I like CHK--the chairman is buying huge amounts of stock;, all USA sourced, so there is no terrorism premium; company owns vast acreage in all the major new NG finds, so not dependent upon one geographic area; and finally, NG is still cheap compared to oil, and is in growing demand.

I also am careful not to allow any one company (or industry) to become too large a part of my portfolio.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

oldgoldbug: Given your handle, I suspect you know something about 'can't miss' bubbles touted by those who reinforce each other with a steady stream of blather.

Agreed, interest rates on long bonds and 10-yr notes are not set by the Fed...and in the face of growing inflation, should be still higher than they are today. Are they telling us there is more economic pain ahead?...perhaps (and if so, oil consumption will decline by still more than we have seen recently).

In Light of Peak Oil, Financial Diversification Is a Bad Idea

Don't know why I bother, as you kids are so sure in your positions that you only half-listen to those with far more experience:

I've been investing for almost 40 yrs. I've seen a number of bubbles, including sure-thing 'nifty-fifty', technology, and now peak oil. They come along and folks can't see beyond the hype, they think they will be money machines forever. They were not...and 'peak oil' won't be either.

I've learned many lessons from my mistakes.

I'll pass along just this one...over the course of the economic cycle, it isn't your big winners that are most important to your wealth; it's your big losers! If you allocate too much in one place, you are setting yourself up for huge losses.

Therefore, anyone who tells you not to diversify should be shunned.

That doesn't mean you should never overweigh 5 or 10% pts. in mega-trends -- like energy, alternative. energy, health care, or materials, for example...but anyone who leaves bonds and broad S&P 500 stocks out of his portfolio is going to pay dearly before this economic cycle ends.

Peak Oil Stocks for the Future

We need to drill where the oil is...if we had drilled in ANWAR when Clinton stopped it, we would have the oil now.

Yes, oil needed to rise to make investments in alternative technologies viable...an it has!

Our Congressmen are totally nuts!...but Mr. Ellard is just as nuts on the opposite end. He sits on his lofty perch and completely ignores the economic destruction, job losses, and international chaos now accelerating to no one knows what conclusion (and long before his favorite alternative energy stocks produce a meaningful impact). It will be YEARS before wind, solar, biofuels, wave, geothermal, or others make a significant contribution to our energy needs. Oil doubling in a year is not good for either the short term or long term. The bubble must burst so we can catch our breath.

Commodities: Bubble or Not?

I appreciate the compliment from StateofCon, but I must respond to his comments on population growth:

Population growth in the USA is (fortunately) a bit above maintenance; it has declined over the last couple decades. Our growth is in large part due to peoples who have come here from other countries...both illegially and legally. (In fact, it is because we need population growth to support our economy, that our government, either democrat or republican, will only give lip service to border enforcement).

Europe is in a much more serious situation with respect to population -- many European countries, including Italy!, have declining populations. European social welfare costs are going to become staggering in a few years.

Yes, we do have a few Mormons here, and they do tend to have large families; however, their contribution to our population growth is not significant.

Commodities: Bubble or Not?

Global demand for oil exceeds supply by 1 billion barrels daily; thus the price goes up.

Some seem to (still) cling to the belief that gasoline demand in the USA influences price. For them, it seems there is no better wake-up than that gasoline demand is actually falling here (down by 7%), while the global price of oil is still rising.

If GLOBAL demand falls, it will first bring demand back to even with supply; than if there is a further falling of demand can bring down the price of oil significantly.

In the face of global growth in living standards, conservation can only produce limited (and temporary) results. I'm betting on increased demand (and thus prices) until alternative sources are actually widely implemented.

Commodities: Bubble or Not?

ETHANOL?...it is a cruel joke!

It is bad enough that a few farm state Congressmen and Senators (Grassly in particular) with seniority were able to ram through this legislation to the benefit of farmers and Archer Daniels Midland (gigantic campaign contributor); but they also included a 60 cents/gallon taxpayer subsidy, and prohibited cheaper ethanol from Brazil.

Than there is the matter of efficiency--it takes almost as much energy to make corn-based ethanol as what is produced. There are more negatives, but you get the idea; ethanol is politics at its worst!

Commodities: Bubble or Not?

We are making a big deal of the spot price of a barrel of oil at the wellhead. As consumers, our main use of oil is fuel, mostly gasoline. After driving 513 miles since my last fillup, I filled my car a few hours ago at $3.549 at a nearby Walmart. (Incidentially, no one mentions that SHARP 46-inch 1080i LCD HD televisions are now sold there for only $1300!).

So the issue is -- when is the price of gasoline going to hurt to the extent that it will change my lifestyle so much that I stop buying HD TV and other items?

I don't know the answer, but I well recall waiting in lines a block long for gasoline during both the 1970s Arab Oil Embargos, when I was glad to get gasoline--at any price!...and so would you! (There was no Strategic Oil Reserve)

Maybe one measure of our pain limit is the % of income devoted to purchasing gasoline. For most of us, $50 or $75 per week is far less than 5% of our gross income...it clearly hasn't hurt most of us yet, and another $25 a week (50% increase) may not hurt either.

It is embarrassing that Americans think cheap gasoline is their right. Gasoline is taxed even more heavily in many countries, and costs the equivalent of $8-$10 per gallon (including Europe); they don't like it either, but they have learned to accommodated it...and it is very likely we will too.

Riots?...nuclear war?...I think not! (Besides, we can't spare the troops from our other 2 wars.)

Whimps! Stop your whinning and war mongering!

Some good may come of this. Hopefully, we will finally get serious about alternative energies (and because it will take years to bring significant amounts of wind, solar, geo-thermal, etc. alternatives on-line, we should start drilling in ANWAR and our coastal areas ASAP). If Clinton had not vetoed ANWAR drilling 10 years ago, we would have 1.5 million barrels more oil today!

Commodities: Bubble or Not?

Sorrry I'm late to this excellent discussion.

When oil increases by 40% in a few months, this is a BUBBLE!...OK, I've said it.

But more needs to be said:

Basically, oil responds to supply/demand fundamentals--however, demand didn't increase by anything like 40% in a few months. But, like other investments, commodities do responds to speculation.

I'm investing in oil, natural gas, and base metals stocks and ETFs, but for no purpose than to make a profit--so, I guess I'm a speculator...arn't you also?

Bubbles burst, and the oil bubble may burst next week; but the bursting of these commodity bubbles are but brief temporary "corrections" that constitute buying opportunities to higher price levels.

This bubble-and-burst situation will continue until either supply increases sugnificantly (which will take decades), or demand is met (also may take decades).

With respect to grains (and unlike the other commodities), supply can be increased rather quickly, even within 1 year in some cases. Therefore, gain bubbles should be burst much faster than those for oil, steel, nat. gas, etc. Still, worldwide demand for grains continues to grow, and prices tend to rise again. Thus, I also continue to invest in grain ETFs.

Finally, I don't care what you call it--bubble, or fundamentals--it will continue to be a good investment.

Is the Commodity Bull Market Over?

Mr. Rothbort is far more likely to be correct in his assessment than he is to be wrong. Thus, I too continue to view the present correction (or is it over already?) as a buying opportunity.

Also, I echo lg71050 -- commodities are a global story; also it is much bigger than Chindia, look at Latin America, Eastern Europe, Southeast Asia (and soon Africa). People everywhere are more aware of what Americans and Europeans are eating, wearing, driving, and doing; they want the good life, and think they deserve it! Look for accelerating growth in infrustructure investments (steel, cement, electrical/electronic equipment, chemicals/fertilizers, and fuels.

Chesapeake Energy, Monsanto: Paying Tit for Tat

Sorry worthy...though I too go long the ETFs and the company stocksworthy, I disagree with your condemnation of options.

Options are a viable way to play the boom market for commodities.

In fact, options provide a way to far greater profits than your approach, with far less invested.

There is lots of room for both approaches (and I'm sure Mr. Zanoni would suggest you use options for only a portion of your investment allocation.