- Reserves deplete faster than oil (in general)
- Oil/natural gas ratio: the price of oil divided by the price of natural gas is at an all-time high (or close). This ratio stands at 17 (historically it has been at about an 8 or so), Natural gas prices will go up, oil will decline, or both. Also, natural gas is not a good hedge against the declining dollar (it is for the most part a domestic commodity) and storage capacity is more limited, thus not as admired by speculators as oil. This explains in part why it lagged the the spectacular performance of oil of late.
- At $4, natural gas it is uneconomical to develop and look for new reserves.
- No OPEC competition, LNG (liquid natural gas) imports are uneconomical at these prices.
- Politically more favorable than coal.
- After emission caps are implemented natural gas will become a cheaper alternative than politically and environmentally unfriendly coal.
Please read the following important disclosure here.
Related Articles
The Hidden Advantages of Investing from NOT New York City
What are the hidden advantages of living away from “noisy” investing centers like New York?
Money Managers Are Not Factory Workers
One of the biggest hazards of being a professional money manager is that you are expected to behave in a certain way: You have to come to the office every day, work long hours, slog through countless emails, be on top of your portfolio, watch business TV and consume news continuously, and dress well and conservatively, wearing a rope around the only part of your body that lets air get to your brain.
DeepSeek Breaks the AI Paradigm
I’ve received emails from readers asking my thoughts on DeepSeek. I need to start with two warnings. First, the usual one: I’m a generalist value investor, not a technology specialist, so my knowledge of AI models is superficial. Second, and more unusually, we don’t have all the facts yet.
Escaping Stock Market Double Hell
Over the last few years, our portfolio has skewed more international. Today, if you only invest in the US, you're experiencing two stock market hells.
0 comments