"The spot coking coal market may not pick up until 2010 at the earliest as carry-over tonnage from FY 2008 is performed at full, or renegotiated lower price levels depending on the supplier and each contract."http://platts.com/Coal/Resources/News%20Features/cokingcoal09/index.xml
"Electricity consumption trends would seem to provide a reliable indicator of economic health." Article is about European Electricity consumption at:http://platts.com/Electric%20Power/Resources/News%20Features/eeedemand/index.xml
"The collapse in prices seen in the latter months of 2008 and the rapid deterioration in the financial climate are causing oil companies to rethink investment plans ... "http://platts.com/Oil/Resources/News%20Features/crudeoil09/index.xml
"Sellers appear resigned to wait for uranium price uplift ... "http://platts.com/Nuclear/Resources/News%20Features/uranium09/index.xml
"The situation has been forcing styrene producers into the spot SM market to buy product to cover their contractual supply obligations."http://platts.com/Petrochemicals/Resources/News%20Features/styrenics/index.xml
Does anyone have any investment ideas based on these facts?
Cordially,J. C. Harperwww.jcharper.net
Investment idea - Income and gain potential. Linn Energy (LINE) $16.21 last (just traded xd yesterday) pays $2.52/yr. (yield ~15.5%), will be partly return of capital this year. About 50/50 oil and gas. 21 year RLI. Production fully hedged thru 2011 & 62% hedged in 2012 at prices which should at least cover the current payout. A fair amount of the hedges are puts. Their hedges were put on in early-mid 2008, which suggests that management is either mighty lucky or knows what they're doing. I suspect the latter. Mike Linn owns 20+% of the stock. Their website is at www.linnenergy.com and has good presentations. I own shares, as do quite a few of my clients.
From http://moneycentral.msn.com/companyreport?Symbol=LINE
Linn Energy, LLC (Linn Energy) is an independent oil and gas company focused on the development and acquisition of long life properties in the United States. The Company’s properties are located in the Mid-Continent and California. Proved reserves as of December 31, 2008 were 1,660 One billion cubic feet (Bcfe), of which approximately 51% were gas, 31% were oil and 18% were natural gas liquids (NGL). Approximately 68% were classified as proved developed. As of December 31, 2008, the Company operated 4,453, or 66%, of its 6,716 gross productive wells. The Company’s properties are located in three regions in the United States: Mid-Continent Deep, which includes the Texas Panhandle Deep Granite Wash formation and deep formations in Oklahoma; Mid-Continent Shallow, which includes the Texas Panhandle Brown Dolomite formation and shallow formations in Oklahoma, and Western, which includes the Brea Olinda Field of the Los Angeles Basin in California.
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Go to http://moneycentral.msn.com/investor/invsub/results/compare.asp?Symbol=LINE
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This is exactly the kind of company I would be looking for in normal times. It looks like a bargain.
However, these aren't normal times. The sanctity of contracts is under attack by no less than the US Federal Government. Lets see - contracts include lease agreements, operating contracts, lines and letters of credit, vendor contracts, existing loan agreements and on and on and on.
So the investment decision boils down to how convinced I am that the courts will uphold contracts and refrain from regulating retroactively. With contracts,fairly and freely negotiated are being negated by government decree for bond holders, mortgage lenders and a host of others to achieve political ends, the decision to buy or not to buy is dependent on unfolding political events, IMO.
The SEC even allow a select few to sell stock, collect the proceeds and never deliver the stock to the buyer (naked shorting). Never in my 30 plus years of investing did I ever harbor a single shred of doubt that I could get my stock certificates if I wanted them delivered to me. Now there is a small, nagging doubt in the back of my mind because "failed to clear" is no longer a rare event.
For me, to buy or not to buy is dependent on politics, not fundamental analysis. I hope I am just being a paranoid old man who doesn't understand the brave new world.