Vladimir Senkov

Investing in Natural Gas: It's Time

John,

I agree natural gas trades at a good risk/reward at the moment. One might even say that it's cheap. However, I wouldn't call FSYS cheap. At almost 14% premium, I wouldn't call UNG cheap either.
If situation around UNG gets resolved, it may very well drop 14% in one day. You may argue that it's insignificant because you already set your sights on making 50% in six months, but I think it would be a mistake to pay for a remote possibility of 50% in six months with almost certainty of losing 14% in the next few weeks.
Why not open a futures account and setup a position in nat gas futures instead of gambling with UNG?
Is "convenience" really worth 14%?
Or are you a believer in the efficient market hypothesis according to which paying 14% premium must be a good deal?
If so, please consider the efficient life hypothesis :)