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Author Topic: Don't get burned in the natural gas market Back to Topics
cmgodwin
Champion Author
Raleigh

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Message Posted: Nov 17, 2012 10:22:27 PM

Are you ready to go into the financial markets and invest in natural gas? Not just local distribution companies but gas producers.

This should be a good time. In the past few years, fracking has spurred the discovery of vast new reserves of natural gas, and gas is a “hot” topic financially.
Visit http://www.newsobserver.com for full article
REPLIES (newest first) Post a Reply
bston
Champion Author Oklahoma City

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Message Posted: Nov 19, 2012 10:29:55 PM

Is anything a surety nowadays?
drpepperTX
Champion Author Texas

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Message Posted: Nov 19, 2012 10:49:19 AM

Heck of a lot safer than cars Amplion.

National Highway Traffic Safety Administration says that 32310 people died last year in traffic accidents.

But more on the subject of this article, most folks just should not be taking on investments such as natural gas without competent supervision.
Amplion
Champion Author Oregon

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Message Posted: Nov 19, 2012 12:24:15 AM

NATURAL GAS DISASTERS HAVE ALWAYS BEEN COMMON.
2010 San Bruno Eight Dead, 38 houses destroyed
2011 Allentown Five Dead
2012 Indiana TWO DEAD
2012 Colorado Five to Hospital
NATURAL GAS IS PROVEN TO BE UNSAFE !!!!!
PathfinderSC
Champion Author South Carolina

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Message Posted: Nov 18, 2012 7:17:34 PM

Good Article.
orphancarguyPE
Champion Author PEI

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Message Posted: Nov 18, 2012 5:13:41 PM

Back away from investing in any company drilling for natural gas....This is almost a pure classic example of a market for resources that is breaking the laws of gravity through extreme future hype unsupported by current reality.

The prices and units quoted are not necessarily the prices and units you should be looking at. Natural Gas is slightly higher than the all-time lows in recent years, due to an immense glut. Essentially there is no place left to store the excess, and companies HAVE to sell it now for whatever they can get to maintain cash flow, until the price goes up, when ways to absolve the excess kick in. Like wholesale new natural gas powered electricity plants replacing most/all of the coal fires plants. Like wholesale adoption of natural gas as a vehicle fuel. That will takes years and take hundreds of $billions if not $trillions to do all the changeovers. Not a good thing for the companies, which are bleeding cash right now because...it actually costs more to get it and distribute it than they are getting for it. Much more. This disconnect is not a picayune matter either. If it is selling under $3.00 per Million BTUs retail, when the companies themselves figure the breakeven point is $4.00, that is one thing and that is bad enough. BUT, if the real breakeven cost, not the 'assumed up until now because we didn't have accurate longterm data' cost, is at the at LEAST $6.50 to $7.50 at Henry Hub, then gas companies/drilling companies are going to suffer an immense round of crash/retrenchment/bankruptcy over several years. Dividends will dry up too when coffers are empty and reality bites.

Facts trump hype any day. Well, eventually they do in any bubble. If you really want to know why it has to be higher priced--which will slow adoption for uses like cars to a crawl--then you can start here:
http://www.beg.utexas.edu/energyecon/ and download and read the paper
The Outlook for U.S. Gas Prices in 2020: Henry at $3 or $10?
The Oxford Institute for Energy Studies,
NG 58, December 2011

Careful--its about 100 pages, and there is enough science, math and fact to upset dozens of 10 second feel-good soundbites.


[Edited by: orphancarguyPE at 11/18/2012 5:17:26 PM EST]
hmw10284
Champion Author California

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Message Posted: Nov 18, 2012 3:39:16 PM

Nice things to consider. However right now is a good time to invest because the prices of stocks are down and many of these companies dividends are yielding in the 10% range. Some better.
amerk73
Champion Author Dallas

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Message Posted: Nov 18, 2012 2:06:12 PM

time for natural gas
nsdp
Champion Author San Antonio

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Message Posted: Nov 18, 2012 12:52:08 PM

Language man there has been no good time for speculators to invest. If you buy real NG your storage costs as you wait for the price to go up would be about $1/mmbtu right now. We need to kick out the JPMorgans, Galdman Sachs , Morgan Stanley's Black Rock etc out of the futures markets to bring stability.
bar1035
Champion Author Charlotte

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Message Posted: Nov 18, 2012 10:57:42 AM

old adage - when everyone is talking about an investment it's time to run
bruin19MD
Champion Author Maryland

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Message Posted: Nov 18, 2012 10:21:45 AM

good article, makes me think. thanks for posting.
merlinCO
Champion Author Colorado

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Message Posted: Nov 18, 2012 9:43:49 AM

That is exactly what the market needs, novice speculators to lose their money to the rich and power hungery big oil companies.
peabeax55
All-Star Author Atlanta

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Message Posted: Nov 18, 2012 9:32:31 AM

Tacodan......">>NATURAL GAS IS PROVEN TO BE UNSAFE !!!!!
And how many people have died from electical fires !

OK! Wow! so are cars and gasoline and candles and firecrackers and rattlesnakes and stairs and motorcycles and .....

Your comment is the most lame I have ever seen......
so you propose living in a padded cell back in the stoneage by yourself
peabeax55
All-Star Author Atlanta

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Message Posted: Nov 18, 2012 9:27:27 AM

Get speculators the heck out. prices are still cheap keep it that way.
Now.....develop more uses and infrastructure.
skempton
Champion Author Vermont

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Message Posted: Nov 18, 2012 8:59:16 AM

Too late for a killing.
farmboyTN
Champion Author Tennessee

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Message Posted: Nov 18, 2012 8:21:12 AM

ok
gs7101
Champion Author San Antonio

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Message Posted: Nov 18, 2012 8:18:25 AM

Thanks for the heads-up!
deputydog082
Champion Author Detroit

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Message Posted: Nov 18, 2012 8:07:35 AM

anytime the people are told its a good time to invest - it's usually NOT!
scu227
Champion Author New Haven

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Message Posted: Nov 18, 2012 8:05:03 AM

We don't need more speculators !!!!!
Tacodan
Champion Author Cincinnati

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Message Posted: Nov 18, 2012 8:04:15 AM

>>NATURAL GAS IS PROVEN TO BE UNSAFE !!!!!

And how many people have died from electical fires !
LanguageMan1
Champion Author Tampa

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Message Posted: Nov 18, 2012 7:48:34 AM

The real time to invest was earlier this year or even last year when prices were extremely low and you'd have made well over 40% to 100% or more already on your money. It's most likely a good investment play though. Was considering it myself. I'm thinking for the long term it's a good play. For the shorter term, prices should be down again, then it'll be an even better play to buy on the way back up for a better profit.

It all depends on where you invest in it though, whether the commodity, the stocks related to it or the funds related to it.

[Edited by: LanguageMan1 at 11/18/2012 7:51:58 AM EST]
OTISFL
Champion Author Pensacola

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Message Posted: Nov 18, 2012 7:31:35 AM

Not taking this as any official advice.
Ltdc
Champion Author Long Island

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Message Posted: Nov 18, 2012 6:51:22 AM

Stay away from commodities unless you really know your stuff.
Rockyguitar
Champion Author Tampa

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Message Posted: Nov 18, 2012 6:48:05 AM

Not sure I'd jump on this bandwagon.
slgas
Champion Author Houston

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Message Posted: Nov 18, 2012 6:40:14 AM

Hopefully you're using a more complete and honored source than this for your financial advice.
MImusicman
Champion Author Michigan

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Message Posted: Nov 18, 2012 6:00:20 AM

Nice title
Wally3023
Champion Author Pennsylvania

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Message Posted: Nov 18, 2012 5:48:35 AM

Buy low and hold
BIGOILEATURCRUD
Champion Author North Carolina

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Message Posted: Nov 18, 2012 5:37:03 AM

I like more liquidity!
Jeff4U
Champion Author Atlanta

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Message Posted: Nov 18, 2012 4:45:13 AM

I have natural gas central heat but I use electric heaters cause it costs less after tracking the cost for either after 7 years.
angel4me
Champion Author San Jose

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Message Posted: Nov 18, 2012 4:01:44 AM

perhaps..........
335d1
Champion Author Virginia

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Message Posted: Nov 18, 2012 3:53:48 AM

Time to build the CNG infrastructure.
jamofsocal
Champion Author Los Angeles

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Message Posted: Nov 18, 2012 3:06:33 AM

Interesting. The model indicates that we have a surplus of natural gas which should drive down the cost of energy. But that would hurt revenues, so how does that help energy investments?
JohnofGB
Champion Author Flint

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Message Posted: Nov 18, 2012 2:11:26 AM

We are the Saudi Arabia of natural gas and still barely use it. Pitiful.
weenerdog
Champion Author Detroit

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Message Posted: Nov 18, 2012 2:00:53 AM

It will always be something

GDAE
Champion Author Wichita

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Message Posted: Nov 18, 2012 1:55:02 AM

My wife thinks I have too much gas already...
graceman
Champion Author Baltimore

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Message Posted: Nov 18, 2012 1:40:20 AM

If only I had the spare cash.
gbs1
Champion Author Minnesota

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Message Posted: Nov 18, 2012 1:40:00 AM

The average investor should stay clear of natural gas
raja29
Champion Author Toronto

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Message Posted: Nov 18, 2012 1:16:35 AM

nope.....
WIWalt
Champion Author Wisconsin

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Message Posted: Nov 18, 2012 1:14:06 AM

Nope not investing
Melinda205
Champion Author Alabama

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Message Posted: Nov 18, 2012 1:09:52 AM

Okay
joeschmo12
Champion Author New York

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Message Posted: Nov 18, 2012 1:04:05 AM

interesting
TXRanger09
Champion Author Dallas

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Message Posted: Nov 18, 2012 12:54:04 AM

Seems there is more than a few big rig manufacturers that are bettiNG large that NG is the way.
bills299
Champion Author Atlanta

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Message Posted: Nov 18, 2012 12:51:52 AM

I am not sure about this one!
MN1
Champion Author Twin Cities

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Message Posted: Nov 18, 2012 12:45:36 AM

Wait and see.
Amplion
Champion Author Oregon

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Message Posted: Nov 18, 2012 12:43:43 AM

NATURAL GAS DISASTERS HAVE ALWAYS BEEN COMMON.
2010 San Bruno Eight Dead, 38 houses destroyed
2011 Allentown Five Dead
2012 Indiana TWO DEAD
2012 Colorado Five to Hospital
NATURAL GAS IS PROVEN TO BE UNSAFE !!!!!
Vetteblu
Champion Author Denver

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Message Posted: Nov 18, 2012 12:39:32 AM

This article is too punny.
uglytom
Champion Author Florida

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Message Posted: Nov 18, 2012 12:36:08 AM

No.
Nicoalbum
Champion Author Ottawa

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Message Posted: Nov 18, 2012 12:15:29 AM

Always like that
Blue_Cruzer
Champion Author Lexington

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Message Posted: Nov 18, 2012 12:14:36 AM

Scams exist in all these markets.
7SPEEDY7
Champion Author Flint

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Message Posted: Nov 18, 2012 12:13:00 AM

Interesting
Beaveronparade
Champion Author Hartford

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Message Posted: Nov 18, 2012 12:12:49 AM

I wouldn't invest my money just yet.
csblesson
Champion Author Texas

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Message Posted: Nov 18, 2012 12:10:33 AM

It's always a gamble
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