Commodities and mining, Long-Term Investing

A Case for Natural Gas

1. The key to identifying the next profitable sector is often to look for what’s been beat up and “under the radar”. Natural gas has been out of favor and on the down slope for a couple of years now.

2. Found at Financial Sense University (click chart to enlarge)


Commitment of Traders has been steadily rising for natural gas, and they say it’s wise to follow the “big boys” aka “the smart money”.

So I’ve placed a bet on this dark horse, and purchased a few shares of UNG (UNITED STATES NATURAL GAS FUND, LP). More details on this “kind of ETF”

In addition, we’re still holding Vault Energy Trust units. Vault Energy derives 69% of its revenue from natural gas. It’s expected that VNG.UN will cut the distribution on the upcoming meeting on August 15, so the unit price has been falling recently. I don’t think this is the bottom yet, but will probably average down our position once the price levels off some.