Wednesday, March 9, 2011

Peyto Q4 Results Due Today

We'll I've been extremely busy lately and haven't been able to comment on much.  Fairfax is reached a 52 week low yesterday.  Prem Watsa released his annual letter a few days ago and it is definitely an interesting read (Click here).  He's worried about about deflation and has entered some contracts to protect against that threat.  I think it's overblown but will be eager to see what he has to say further on the matter.

Peyto will be releasing their Q4 results today after the bell.  Don't expect any market moving news as AECO gas prices are currently $3.50/mcf.  Most gas companies are losing money, full cycle, at that price.  I have heard that the land retention shale gas drilling in east Texas should be complete by mid year.  Hopefully gas prices start to recover shortly following.  Regardless, Peyto can afford to be patient if required. 

I've been extremely busy with work and a few other concerns that I have been unable to post.  I have so much to write but so little time.  Ice fishing season is almost over and I've yet to even get out once this year.  The end of the season is usually the best time anyway and with all the cold we've had this winter I'm not overly about missing out on the cold weather.

I have comments from a number of good books I have recently finished reading.  A Short History of Financial Euphoria is an excellent short read if you have the time.  It's amazing how many of the financial panics share common characteristics.  Mostly all bubbles start on a sound premise but eventually people focus solely on the price action.  Once the focus is on the price action people stop acting rationally.  Leverage then is the final factor the puts prices through the roof.  In the stock market we will continue to have wide swings and bubbles as the vast majority of market participants tend to focus solely on the price action not the underlying economic value. 

Kevin Graham

Disclosure: Long FFH & PEY.

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