Forum Archive Index - February 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Macdunk,

>
>What a great time to invest. Doom and gloom every where.   Stacking
>gold under the bed and selling the family silver to do it.  Damned
>pity Im fully invested.  
>
>

Lesson number 7.   Never be 'fully invested'.  I can't predict when 
any share will take a big leg downwards.   But I can predict that if 
you aren't fully invested, you will be there to take advantage of it.

>
>
>Snoopy how will this affect contact energy.  Are they covered if 
>we run out of gas sooner than later?.  It looks like this
>winter power may be in short supply yet again. 
>
>

It's a funny business this power thing MacDunk.   The profitability, 
as near as I can work it out, is largely determined by the cost of 
generation verses the wholesale price in the market.  If the price of 
gas goes up substantially (and I think it will) and the wholesale 
power price goes up in tandem, all that will do is make the Clyde 
dam, that Contact owns, hugely more profitable than it already is.
I think a gas price increase will be a case of swings and roundabouts 
for Contact Energy

Furthermore I am guessing that when the search for new gas fields 
begins in earnest ( and the only reason why it hasn't up to now is 
that Maui gas is so cheap ) then the new supply may not be as 
expensive as present dire predictions might lead us to fear.  

If I can possibly make it next week I'll be at the Contact 
AGM, so I can give 'sharechat' a first hand report back if the issue 
comes up.

SNOOPY


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