IMO, now is not the time to be investing in any commodities ETFs and ETNs. They are being closely looked at by the Commodity Futures Trading Commission because the funds/notes have to buy more underlying commodity futures contracts in order to be able to issue additional shares which is necessary due to their popularity and there's growing concern that the huge amount of money pouring in may be distorting market prices.
i'm not really a fan of holding the raw commodities other than gold.......especially in the ETF form.....and obviously gold easiest to hold in physical form.....
very volatile and the other commodities quite dependent on the overall economic landscape which is very up in the air at this point.....
I agree with line tamer i'd go with the equities related to natty gas instead if you want to dip into that market
as for Ag....MOO is the Ag equity etf
very volatile and the other commodities quite dependent on the overall economic landscape which is very up in the air at this point.....
I agree with line tamer i'd go with the equities related to natty gas instead if you want to dip into that market
as for Ag....MOO is the Ag equity etf
I am in this China play right now. SGAS
I believe natural gas is the most undervalued commodity at this time and we could see natural gas prices start to soar in the near future... which means we could see major growth in SGAS's natural gas sales in the years ahead.
With China's new stimulus package and other efforts the country is taking to boost their economy... SGAS expects to see the return of growth of household connections, especially in small-to-medium sized cities where the real estate market is at an early developing stage.
Imagine if SGAS is able to successfully bring their net income back up to $7.7 million like in 2007 and the stock traded with a P/E of 15 like many U.S. utility companies... in this scenario we would be looking at a share price of $3.85 on a fully diluted basis!
SGAS has positive shareholder equity of $58.25 million! Therefore, the company has a fully diluted book value of approximately $1.94 per share! I believe SGAS's upside potential at $0.42 is astronomical and I urge you to research this company immediately!
do your DD and good luck to you :toast:
I believe natural gas is the most undervalued commodity at this time and we could see natural gas prices start to soar in the near future... which means we could see major growth in SGAS's natural gas sales in the years ahead.
With China's new stimulus package and other efforts the country is taking to boost their economy... SGAS expects to see the return of growth of household connections, especially in small-to-medium sized cities where the real estate market is at an early developing stage.
Imagine if SGAS is able to successfully bring their net income back up to $7.7 million like in 2007 and the stock traded with a P/E of 15 like many U.S. utility companies... in this scenario we would be looking at a share price of $3.85 on a fully diluted basis!
SGAS has positive shareholder equity of $58.25 million! Therefore, the company has a fully diluted book value of approximately $1.94 per share! I believe SGAS's upside potential at $0.42 is astronomical and I urge you to research this company immediately!
do your DD and good luck to you :toast:
I am long nat gas through the ETN "GAZ". There is definitely a tremendous more upside potential in nat gas vs the downside risk. However, you need to be able to withstand some more downside vol at least until some of the supply lines start to drawdown, which may not be until winter here in the Northeast.
Regarding DBA, soybeans have had a run, corn is out of gas, sugar is at 28 year highs. Only wheat, which is hitting some support levels, has upside potential. IMO.
Also for UNG, GAZ, and a few other ETFs, you are going to pay a premium over NAV for the reasons mentioned earlier re: CFTC spec limits.
Regarding DBA, soybeans have had a run, corn is out of gas, sugar is at 28 year highs. Only wheat, which is hitting some support levels, has upside potential. IMO.
Also for UNG, GAZ, and a few other ETFs, you are going to pay a premium over NAV for the reasons mentioned earlier re: CFTC spec limits.
UNG - NO
GAZ - NO
FCG - NO
Dont touch Nat Gas, way too much in reserves ... talk about super-contango, it's going to be at least 6 months to blow off those reserves. If you want a play on Nat Gas, check out CLNE as they do the nat gas fueling stations and when Congress gets back from Recess, they'll be passing the Act that mandates more Nat Gas vehicles and for more trucking companies to use Nat Gas trucks.
Dont play Nat Gas directly, you'll lose money.
GAZ - NO
FCG - NO
Dont touch Nat Gas, way too much in reserves ... talk about super-contango, it's going to be at least 6 months to blow off those reserves. If you want a play on Nat Gas, check out CLNE as they do the nat gas fueling stations and when Congress gets back from Recess, they'll be passing the Act that mandates more Nat Gas vehicles and for more trucking companies to use Nat Gas trucks.
Dont play Nat Gas directly, you'll lose money.
Best direct play on Nat Gas is HGT ... should be about $22 by year's end by my calculations and assuming Nat Gas futures for Nov and Dec are higher than what they're at now. Your call though, I'd avoid Nat Gas like the plague for now. Hopefully the contango gets worked out this Winter. GL
I did a little more research on Nat Gas. While it is still in contango/super-contango, the price of Nat Gas can't really fall below $2 as this is basically the cost to harvest it. While I still think HGT is a solid play, I would also recommend you checking out $CEP. I think there is a lot of money to be made with this company. Let me know what your research uncovers. GL
been doing some research and SBR IMO is the best way to play it
looks like a pure natty gas play for most part...oil is minimal
also from what i can tell this will not run out anytime soon
in 1982 when it started they have 59.9 BCF of proven reserves
in 2006 they had 36.4 bcf of proven reserves
and in 2009 they had 37.2 bcf of proven reserves
so its depleted some over the years but past 4 years they've increased their reserves
basically you own a bunch of oil land and get a cut....if it reaches a day they completely run dry than stock worth zero but doens't look like that will happen anytime soon
this year they gonna pay out about 2.80.....with natty gas prices super duper low.....and based on reserves has a life of 8-10 years
so worst case scenerio i see is natty gas stays low for 10 years...and they find nothign new....you get back 28 bucks distribution for the current price of 40 dollars....and this scenerio of happening is nil basically
also over time i'm sure if natty gas prices get back up they can do shale gas and shit like that they own land in fl, miss, lou, miss, nm, okla, and tex
if you invested in this back in the 80s you woulda had a ridiculous return.....gone from 2 to 40...and paid 7-10% divy along the way as well.....and from what i can tell seems like they will keep pumping for many years going forward....as they find more reserves on the land....
also the fact that they still paying a pretty solid divy with natty gas prices this low....tells you they have some damn low costs as well....
looks like a pure natty gas play for most part...oil is minimal
also from what i can tell this will not run out anytime soon
in 1982 when it started they have 59.9 BCF of proven reserves
in 2006 they had 36.4 bcf of proven reserves
and in 2009 they had 37.2 bcf of proven reserves
so its depleted some over the years but past 4 years they've increased their reserves
basically you own a bunch of oil land and get a cut....if it reaches a day they completely run dry than stock worth zero but doens't look like that will happen anytime soon
this year they gonna pay out about 2.80.....with natty gas prices super duper low.....and based on reserves has a life of 8-10 years
so worst case scenerio i see is natty gas stays low for 10 years...and they find nothign new....you get back 28 bucks distribution for the current price of 40 dollars....and this scenerio of happening is nil basically
also over time i'm sure if natty gas prices get back up they can do shale gas and shit like that they own land in fl, miss, lou, miss, nm, okla, and tex
if you invested in this back in the 80s you woulda had a ridiculous return.....gone from 2 to 40...and paid 7-10% divy along the way as well.....and from what i can tell seems like they will keep pumping for many years going forward....as they find more reserves on the land....
also the fact that they still paying a pretty solid divy with natty gas prices this low....tells you they have some damn low costs as well....
here's a summary of what i was rambling about as far as lifespan goes
In 1982, when the Trust was first formed, it was
estimated that the reserves for the Trust were approximately
9 million barrels of oil and 62 billion cubic
feet of gas. At that time, the Trust was expected to
have a life span of 9 to 10 years and be fully depleted
by 1993. In the 27 years since the inception, the Trust
has produced approximately 17.4 million barrels of
oil and 220 billion cubic feet of gas. As a result of
this production, the Trust has paid out approximately
$883 million to unit holders over the years. With this
year’s reserve estimate of 5.9 million barrels of oil
and 37.2 billion cubic feet of gas remaining, it could
be estimated that the Trust still has a life span of 8 to
10 years. The current economic conditions create an
environment that could further expand and enhance
the distributions in the years to come.
In 1982, when the Trust was first formed, it was
estimated that the reserves for the Trust were approximately
9 million barrels of oil and 62 billion cubic
feet of gas. At that time, the Trust was expected to
have a life span of 9 to 10 years and be fully depleted
by 1993. In the 27 years since the inception, the Trust
has produced approximately 17.4 million barrels of
oil and 220 billion cubic feet of gas. As a result of
this production, the Trust has paid out approximately
$883 million to unit holders over the years. With this
year’s reserve estimate of 5.9 million barrels of oil
and 37.2 billion cubic feet of gas remaining, it could
be estimated that the Trust still has a life span of 8 to
10 years. The current economic conditions create an
environment that could further expand and enhance
the distributions in the years to come.
actually now that i look closer oil is actually a much larger chunk than i thought
looking at sept distribution 2/3rds of payment came from oil sales....while 1/3rds from natty gas....with the oil/natty gas ratio being the highest ever....
anyway interesting stock and you get some diversity in there too...looks like over the long haul generally looking at half and half coming from oil and gas......
and the rate of depletion over time looks lower....9 billion estimated in 82...now have 5.9....27 years later
looking at sept distribution 2/3rds of payment came from oil sales....while 1/3rds from natty gas....with the oil/natty gas ratio being the highest ever....
anyway interesting stock and you get some diversity in there too...looks like over the long haul generally looking at half and half coming from oil and gas......
and the rate of depletion over time looks lower....9 billion estimated in 82...now have 5.9....27 years later
