StockInterview.com

June 6, 2007
By James Finch and Julie Ickes

coming soon! Print Version
Adobe Reader required click here for free download

Throwing a Dart at the Natural Gas Dartboard

Just-in-Time Debut of “Investing in China’s Energy Crisis”


Investors err in believing summer time is slow for stocks.

When we began coverage on the uranium sector three years ago, an investor could have thrown a dart at any uranium company and made money.

Last summer, we began covering the molybdenum sector. Again, investors who were then wise enough to build positions reaped percentage gains of 200 percent or more by speculating on any legitimate molybdenum prospect. Some investors enjoyed gains of 400 to 800 percent on the better juniors.

This summer, we believe another beaten-down sector’s time has come. Who can argue with Beijing’s hottest Saturday in May since 1951? Or twenty-two drunken Muscovites who drowned whilst they were attempting to cool themselves off during a blistering weekend in May?

Whether you believe in abrupt climate change and global warming or not, growing legions of investors are betting in that direction. Whether their bets are placed on wind farms or solar panels, it may not matter much. We looked to the one sector which has been pummeled over the past 15 months. Most investors have avoided it like the plague.

We believe natural gas is primed to heat up – as early as this month.

Best of all: Only a few astute investors or ‘big money’ are paying attention.

On Monday, the holding company Loews Corp (NYSE: LTR), which is controlled by the billionaire Tisch family, announced it was buying most of Dominion’s (NYSE: D) natural gas reserves – equal to 3.5 trillion feet of natural gas – for about US$4 billion. Texas-based XTO Energy (NYSE: XTO) bought the balance, paying US$2.5 billion.

On Tuesday, Bloomberg News reported that Canada’s natural gas prices could rise because strong air-conditioning demand would increase gas consumption at power plants.

Nine months ago, one of the world’s leading commodities investors, announced on the Fox News network, “Two hedge funds have collapsed recently, have driven down the price of natural gas. Two things: It's gonna be cheaper to heat your house if you use natural gas; if you don't use natural gas, switch to natural gas. But secondly, buy natural gas, you'll make a fortune.” We have always respected the uncanny eye of Jim Rogers, who admittedly is not a market timer. In July 2006, he told StockInterview, “I’ve sold out every (other) emerging market in the world. I’m investing in China….”

Smart money knows when to bet heavily.

Technical chartists are particularly excited about the prospects of a natural gas rally, and more excited about natural gas stocks. The key resistance level is said to be $8.25 MMBtu, about $0.50 away from the current Henry Hub Natural Gas pricing. Some are forecasting a breakout between 40 and 50 percent higher - once it crosses through the resistance ceiling.

The Amex Natural Gas Index (XNG) has been making higher highs and higher lows since mid January of 2007.

And finally, Mad Money’s Jim Cramer predicted this past Monday, “Natural gas is back. People don't understand that. Natural gas is the place to be again. ... We're going into hurricane season…” When the loud mouth shrieks, it might be time to pay attention.

Rarely have there been two named Atlantic tropical storms in May.

While this may or may not portend what ‘weather events’ could transpire later this summer, we just had two named storms in May. The 2006 summer was predictable. Just as the stock markets are closing and the Florida rains start (during July and August), hurricane season could be light or negligible. When May and June is super hot, with drought restrictions, sea water is warmer and a breeding ground for hurricanes. We’ve had severe drought restrictions in our area. Hence, we think Cramer and other forecasters are calling it on the money.

When the big money throws darts at the natural gas dartboard, then the mainstream pays attention – and the retail investor follows.



Investing in China’s Energy Crisis

Because our research concluded the most desperate country eager for natural gas was China, we investigated this area in our typical way. It took 18 months of research to complete this task. This has resulted in the launch of our new publication: Investing in China’s Energy Crisis.

China’s energy crisis is downright frightening.

China’s steel industry is growing at a level not seen since Europe’s and North America’s industrialization era of 1875-1900 and far greater than the post-war reconstruction of 1950 – 1970. China is producing 34 percent of the world’s steel production.

China’s cities are being built at an unimaginable rate. About 3,000 new automobiles are hitting the streets every day.

China consumes 44 percent of the world’s iron ore mined, 25 percent of the world’s aluminum and 20 percent of the world’s copper production.

For this massive production, China needs energy. Yet in January, the country began importing coal for the first time in its history. It is also the world’s largest producer and consumer of coal.

With every new energy discovery, the find is immediately earmarked for new production facilities. The natural gas from a recent discovery of 3.8 trillion cubic meters northeastern Sichuan Province was instantly assigned to continue fueling new and existing smelters!

From where will China secure its reliable energy sources to supply this growth?

It was in an effort to answer this question which drove our investigation.

China has an energy crisis of biblical proportions. And the most highly regarded money managers are capitalizing upon China’s energy crisis.

Legendary investor Warren Buffet has already taken a stake in one of the companies we discuss in our book. Some of the world’s top hedge funds – SAC Capital, Citadel Associates and Renaissance Technologies – own shares in another company. Sprott Asset Management has taken a position in yet another company featured in our publication.

To satisfy our globally diversified readership, we included large cap, mid cap and small cap companies listed on the North American, European, Australian and Hong Kong stock exchanges.

In order to provide our readers with a glimpse of our comprehensive publication, we have provided a webpage link to read several sample pages at no charge. We are completely confident in the timing of this publication and the energy sectors we have covered.

As a result, we are offering Investing in China’s Energy Crisis at a 25-percent discount through June 12th. We have made this 153-page electronic book available for instant download. The CD-ROM version will be available later this month, but we wanted to make this publication immediately available to you.

Our 18-month intensive investigation into China’s insatiable energy appetite delivers a detailed overview of this country’s hurdles and breakthroughs in providing its burgeoning economy with reliable sources of energy. StockInterview uncovers leveraged investment opportunities on both the North American and European stock exchanges where investors can profit from China’s search for ‘new energy silk roads.’ Find out the latest research into China’s alternative energy solutions and how the country can reduce its air pollution while continuing to power its breakneck economic growth.

153 pages, Over 110 Photos, charts, maps
(eBook format only. Publication Date: June 5, 2007)

To download a free sample ebook and to purchase the full version, please go to http://bookstore.stockinterview.com/CBM-ebook.html


COPYRIGHT © 2007 by StockInterview.com, Inc. ALL RIGHTS RESERVED.

Please email your feedback on this article: jfinch@stockinterview.com