Because You Asked: Why Energy Investors Should Thank the Hedge Funds and other Hot Money for Dumping Energy Assets Cheap


May 19, 2010 (Investorideas.com energy newswire) Investorideas.com has received many requests to re-post Mr. Miller's current analysis of the US Energy and Infrastructure market, originally posted May 17, 2010, where he accurately made the call that investors should "seize the moment" and purchase as many high quality public energy and infrastructure companies as possible at the current massively oversold prices.


Mr. Miller has made the call and supported the case for remaining invested long term in the Energy and Infrastructure market, and the leading money managers have started to publicly acknowledge that Mr. Miller made the correct call and starting to move money back into the oversold Energy sector in recent days.

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Let me start by saying that experienced energy investors savor the times when the "Ambulance" chasers dump quality energy companies en masse to raise capital in order to chase a wounded victim, the Euro in this case.

For the record, the Euro is not going to fail. Some of the weaker countries in the EU may ultimately be removed from the Euro economic base, but as I will explain, they never should have been there in the first place. Hold that thought, and we will come back to it shortly.



For those investors that either know me from the Global Energy Industry over the past twenty years (20) or those that follow my commentary, I am certain all of you know my conviction that to accumulate and maintain true net worth, you must have a significant amount of your assets invested in the Energy Sector, with strong emphasis on US Energy companies, due to the preservation of capital.



It is common knowledge that I spent half it not more of my career working in the Global Energy Industry, mostly in Europe and Asia, with the balance in the US. While I am not a politician, when you work in Europe, especially in the Energy Sector, you must be part commercial executive and part politician, given the long, deep rooted socialist ideology in countries like France in particular, among others.



When the European Union was formed, and the Euro was created, the informed energy and other industry executives "knew full well" that the lesser countries like Greece, Italy, Spain and Portugal were not strong enough financially to meet the guidelines set out by the EU and doubted they every would meet the debt to GDP ratios and other key metrics. However, the euphoria about including as many countries in the Euro to compete with the US Dollar at that time overshadowed the economic reality that many of the lesser European countries were admitted way too soon, if they should ever have been allowed to become part of the EU in a currency weighted scenario.



Also, the capital markets, the very ones that are now attacking the Euro "knew full well" that the lesser countries that I refer to above and they refer to as "PIIGS" were not financially capable of meeting the EU guidelines. This includes many of the financial executives that are now running Hedge Funds, Bank Currency Trading operations, and other institutional investors that I refer to in my opening statement as "Ambulance" chasers.



So, where does that leave us? Well, firstly when extremely high quality energy companies get absolutely dumped for no good reason other than Ambulance chasers need to raise money fast to chase the latest trade en mass with the rest of the heard, you must be able to identify this movement and capitalize by purchasing these companies at significant discounts.



You can dispel that there is any reality to what is commonly referred to as "market correction". There are only two types of investing that are credible, owning hard assets such as Energy (Oil, natural gas, and other products) and by default, you control or own "real estate", which as I have stated in prior analysis is the foundation of investing dating back to the beginning of recorded human time.



Leave the "market correction" myth to the rest of the market. The undisputed historical and prospective fact is that "he who controls the natural resources" controls the world we live in, irrespective whether it is the US, Europe, or Asia. The Chinese, despite their lack of respect for the rule of law, sanctity of contracts, and basic business honor, understand that they must control the natural resources necessary to promote their economy, which is why you see the Chinese government owned and controlled energy and infrastructure companies buying assets anywhere they can "cheaply" now as they know what I know, you must lock down your natural resource supplies, for otherwise you will not be a "landlord", but be a tenant and pay rent in perpetuity.



For those old enough to have studied history, this is the primary reason the Japanese decided to attack the US in 1941, they were being starved of natural resources and had none of their own, and thus they had to seize other territories in Asia which produced oil, rubber, and iron ore to support Japan’s economy.



Now, we have a global economy now, so I don’t think anyone will be going to war anytime soon to seize control of natural resources, other than the first Gulf War, which was absolutely about insuring Kuwait and more importantly, Saudi Arabian oil kept flowing freely to the global markets.



The moral of this history brief and story is that while the investing world has changed, the reasons to invest have not. When Hedge Funds, Hot Money, and Ambulance chasers dump energy and infrastructure assets cheap, like they have in recent weeks, you should seize upon this "gift" and buy as much of the high quality public companies in the sector as you can.



For just as quickly as the Hedge Funds, Hot Money, and Ambulance chasers dumped energy and infrastructure stocks, they will come back into the sector in full force of a thundering herd of water buffalo struggling to cross a river infested with crocodiles when they grow tired of their latest chase, the Euro. Why will they do this you may ask, well despite the well informed investors reasons for owning natural resources outlined above, Hot Money has no choice. They must chase the trade for a living, and energy and infrastructure is a "trade in perpetuity", you must own it if you manage money.



Previous commentary ,"Did You Miss the Biggest Buying Opportunity in Energy, Thursday May 6, 2010" by energy executive Karl Miller was one of the most read articles on Investorideas.com.



Read the full article published May 6th at Investorideas.com:

http://www.naturalgasstocks.com/Karl_Miller/news/5071.asp



Karl Miller
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Karl Miller : “EU, House of Cards Economically”

Energy Investing News; Energy Commentary from Karl Miller

Delta B.C., April 8, 2010 (Investorideas.com energy newswire) - www.InvestorIdeas.com, a leading investor research portal updates investors with recent commentary from regular contributor, energy executive, Karl Miller.

As oil prices decline for the second day, and markets pull back on Greece debt concerns, Mr. Miller notes: "The European Union continues to be a house of cards economically with a very weak economic foundation being further eroded by Greece, Portugal, Spain and Italy. Expect more fiscal problems to be uncovered which will further degrade the Euro, drive global interest rates up, an force capital to pull back across the board."

Yesterday’s column excerpt –

Take Profits Across the Board in the Energy Sector
Upon further analysis, Mr. Miller is moving from a "hold rating" to actively taking profits across his entire energy portfolio based upon his personal opinion that the equity markets have gotten well ahead of all logical fundamentals, looming residential and commercial debt write downs in the billions of US Dollars, and absolute rising interest rates in the ten to 30 year range ahead for the US Government Debt. The cost of borrowing is going to rise in for the US Government sooner rather than later, and this will take fiscal policy matters out of the hand of the US Federal Reserve and place them in the hands of the institutional market investors. This will also force additional friction with Euro and with the China devaluation is still in question, more uncertainty.

Full article- http://www.investorideas.com/Companies/NaturalGas/Karl_Miller/news/4071.asp

Mr. Miller is acclaimed for multiple ground breaking market calls and investments, including the U.K switching from a net gas exporter to a net gas importer in 2000, called the California energy crisis in 2001, called the Ethanol and Bio diesel boom and bust in 2007, called the renewable energy boom and bust cycle underway in 2008, and most recently called the revival of natural gas in the United States in 2009.

Mr. Miller is a globally recognized energy executive and institutional investor with a balance of both financial and energy sector expertise. Mr. Miller began his career on Wall Street during the 1980s and has an extensive background in banking, commodities trading and risk management.

Mr. Miller has a long history in the global energy business and has held a variety of executive management positions both within the United States, Europe and Asia. Mr. Miller has bid on over $25 billion in energy related assets during his career.

Mr. Miller has built, restructured and managed energy businesses for major public energy companies on several continents, including PG&E Corporation, Electricite de France, El Paso Energy, Enron Corporation and JPMorgan Chase.

Investors following the energy sector can also follow Karl Miller in the energy news RSS feed. Subscribe here:
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Disclaimer: Our sites do not make recommendations. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. We attempt to research thoroughly, but we offer no guarantees as to the accuracy of information presented. All Information relating to featured companies is sourced from public documents and/ or the company and is not the opinion of our web sites. This site is currently compensated by featured companies, news submissions and online advertising. www.InvestorIdeas.com/About/Disclaimer.asp



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Consistent with Mr. Miller's weather update on December 30, 2009 titled "More Bad Weather Forecasted to continue through First Quarter of 2010 from Rockies to East Coast"


See Link: http://seekingalpha.com/instablog/522236-karl-w-miller/41642-more-bad-weather-forecasted-to-continue-through-first-quarter-of-2010-from-rockies-to-east-coastAccuweather's Senior meterolgist Joe Bastardi posted the following long term weather forecast today titled "The Hounds of Winter Are Set to Howl!"http://www.accuweather.com/video-on-demand.asp?...

Energy Commentary from Karl Miller at Investorideas.com and its energy portals
Read Bio and More info and articles at :http://www.naturalgasstocks.com/Karl_Miller/

New Energy Investing Column at Investorideas.com with Karl Miller
Energy Commentary from Karl Miller

Visit http://www.naturalgasstocks.com/Karl_Miller/

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About Mr. Miller
Karl Miller
Mr. Miller is a globally recognized energy executive and institutional investor with a balance of both financial and energy sector expertise. Mr. Miller began his career on Wall Street during the 1980s and has an extensive background in banking, commodities trading and risk management.
Mr. Miller is acclaimed for multiple ground breaking market calls and investments, including the U.K switching from a net gas exporter to a net gas importer in 2000, called the California energy crisis in 2001,called the Ethanol and Bio diesel boom and bust in 2007, called the renewable energy boom and bust cycle underway in 2008, and most recently called the revival of natural gas in the United States in 2009.
Mr. Miller has a long history in the global energy business and has held a variety of executive management positions both within the United States, Europe and Asia. Mr. Miller has bid on over $25 billion in energy related assets during his career.
Mr. Miller has built, restructured and managed energy businesses for major public energy companies on several continents, including PG&E Corporation, Electricite de France, El Paso Energy, Enron Corporation and JPMorgan Chase.
Mr. Miller holds an MBA in Finance from the Kenan-Flagler Business School at The University of North Carolina, Chapel Hill. Mr. Miller also holds a B.A. in Accounting from Catholic University located in Washington DC.
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Why the U.S. Natural Gas Industry is NOT in a State of Permanent Excess Supply
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U.S. Renewable Energy: A Self-Inflicted Crisis in the Making


Disclaimer:
All content is the opinion of Karl Miller. Mr. Miller is not compensated for the creation of the published content.
Content found in the articles is subject to the terms found in the InvestorIdeas.com disclaimer and does not represent a recommendation of investment advice. Investors should seek the advice of a qualified investment professional prior to making any investment decisions.



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Investors also have the option to access the directories as part of the Investor Ideas Membership premium content. The full directory is now available to Investor Ideas members as part of the annual membership that currently features 9 stock directories and investor newsletter.