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At 03:31 PM 5/21/2006 -0400, you wrote:
Chesapeake
Energy is a good example
of this prinicple. Despite all of the great fundamentals you cite,
CHK peaked when natural gas
prices peaked circa Oct. 1, 2005. So, why swim against the
tide?
It is far easier to pick which
way the race will be run than pick the winning horse.
Because it's an over-looked fact they sold their production for two years
at twice the current price of gas and the tide has exposed a buying
opportunity that didn't exist before this happened. Earnings will
bring this reality home and if in the mean time, it drops further, I will
simply lower my basis by buying more at the lower price.
I'm not a fool though, I don't chase stocks down in most cases. I
don't try to catch falling knives as it were but I will take advantage of
swings caused by sector movement or general market conditions in growing
companies with low PE's, insider buying and other strong
fundamentals. The spike you refer to was caused by hurricanes and
hurricane season begins next month.
Bob
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