Mr. Miller warns that China continues to be irrelevant to the US economy and energy complex at the current time, given the fact that there is no fundamental U.S. demand.
Oil and Natural Gas are decoupled in the U.S. and investors should not chase a speculatively driven oil price when it has nothing to do with the fundamentals on the ground relating to Natural Gas production and demand in the United States. Oil is a dollar based, but has no linkage to natural gas in the U.S. as it does in Europe and Asia.
Mr. Miller has issued a sell recommendation on Natural Gas producers. There is no fundamental reason for Natural gas to trade above $3 mmbtu in the U.S. in the near term.
Mr. Miller expects natural gas to correct to the $2.50 to $2.75 mmbtu price range getting cheaper, as there is no demand. Thus, the pipeline and natural gas producers will suffer reduced earnings and are overvalued as well.
Chinese government owned and controlled energy companies are deploying capital cheap natural resources globally outside the U.S. to shore up their own deficient domestic portfolio. Chasing China or Asia in the equity market rally is a false illusion in the near term.
Mr. Miller retains a sell recommendation on U.S. renewable energy companies. He predicts will see many of these companies, which are reliant upon massive government subsidies, state approval of pass through price increases, and highly levered fail and/or be purchased at distressed prices when the bust comes, and it is sure to come.
Chasing a false market rally is a formula for failure for all class of investors. Mr. Miller recommends that the sidelines are the best placement of capital at the current time. The real buying opportunity will come, but now is not the time.
About Mr. 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 1980's 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.
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.
Mr. Miller is currently on medical leave until late 2009.
Source: VBCC
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