Is there a massivenatural gas field discovered in the Appalachians?

For many years geologist have known about the Devonian black shale described as the Marcellus. Shale itself is simple and easy to spot with its black color and is slightly radioactive, making it easy to detect on a geophysical well log. The problem was that most wells drilled within the Marcellus did not yield great amounts of gas. Most natural gas industy players never envisioned the formation being a “super giant” gas field, thus very few investments were made in the region. As recently as 2002 the United States Geological Survey circulated its “Assessment of Undiscovered Oil and Gas Resources of the Appalachian Basin Province.” In their survey they came to the conclusion the formation contained an estimated undiscovered resource of about 1.9 trillion cubic feet of gas. Provided the tremendous area of the Marcellus, it wasn’t a large amount.

Major corrections in estimates and production

In 2003 a corporation called Range Resources drilled a well in Washington County, Pennsylvania (located within the Marcellus). Early results inferred good flows of natural gas were probable. They started to experiment with horizontal drilling and Hydraulic fracturing techniques that had worked well previously in other Barnett Shale wells in Texas. Apparantly something worked. Production began in 2005, and by 2007, over 350+ wells had been granted permits in Pennsylvania alone. As time progressed many insiders began to take notice. In the early part of 2008, two science professors issued estimates that the Marcellus formation could contain more than 500 trillion cubic feet of natural gas. Using “fracking” techniques, and horizontal drilling techniques, the scientists estimated approx. 50 trillion cubic feet of gas were recoverable. If true, the valuation of recoverable resources would be in the trillions also, and would be enough to satisfy the needs of the United States for decades.

What is shale and exactly how is gas taken from it?

Shale is in essence rock. It is shaped by organic matter that has decayed and beenstored below the ground for millions of years. Natural gas is formed in the pore spaces of the shale, and collects inside of fractures within the shale, and is also collected within mineral grains and organic material. The gas has difficulty esacaping due to the fact that the pore spaces and fractures contained bythe shale are really tiny. Nearly all older wells within the Marcellus shale region produced gas, but at a very delayed rate. The majority wells that produced had one thing similar. They intersected multiple natural fractures inside of the formation. The well bore would intersect the natural fractures and adequate gas would be produced to make the wells sustainable.

Horizontal drilling and fracturing

Nearly all naturally occurring fractures within the Marcellusare vertical, hence a vertical well wouldn’t intersectmany fractures. Through newly created horizontal drilling methods, suddenly wells could coincide with many pre-existing fractures. This radically increased preliminary output of wells drilled. Another process used to enhance production is Hydrofracing. This is done by sealing off a bore hole and inserting water or gel at extremely high pressure into the well. The excessive pressure fractures the shale and raises the size of preexisting fractures. To be able to stop the fractures from closing when the water is removed, sand or a different form of “propent” is required to preserve the size of the fractures and enable the gas to emanate into the well. making use of these two practices, wells were able to substantially raise the flow of gas, and profits for the drillers.

Potential economic benefits

The Marcellus shale is the largest volume of natural gas that is situated near the major population regions of New York, New Jersey, and the rest of the Eastern Seaboard. The shale is also located in a location that is central to the Eastern Midwest regions of the United States. Given that most of the gas has to be moved by pipelines, the central locale leads to noticeably lower investments for transportation. As time passes and the accessibility of the gas is confirmed, the infrastructure to drill, move, and consume the gas will be magnified. Could Pennsylvania be the next Texas of energy creation?

Landowners, Leasing, and Right-of-ways

Just like Jed Clampet, several people are finding new found assets in acres they believed was only good for farming etc. In the begining mineral rights were being purchased for a hundred or so dollars per acre, but lately that figure has grown to as much as two or three thousand per acre. Landowners have begun to recieve checks in the hundreds of thousands, just for the oppotunity to drill. As well as mineral rights, gas producers also need to have right-of-ways to construct pipelines to transport the gas to the place it will be consumed. It is estimated that thousands of miles of pipeline will be required to get the gas to locations it will be utilized. Right-of-ways are currently being bought throughout the Marcellus Shale and can range from a couple dollars per linear foot to a hundred dollars per foot in populated locations.

Drilling activity and companies involved

There are numerous companies involved in the Marcellus shale. They take part by leasing mineral rights from land owners or sharing in royalties of generating wells. Range Resources, Chesepeake Energy, Cabot Oil & Gas, Southwestern Energy Production Company, Atlas Energy Resources are just a few of the companies taking part in the rush to increase theirnatural gas holdings in the area. More on these, and many other natural gas stocks here.

Many investors use closing prices reported in the newspapers to monitor their holdings. But not all closing prices are the same, and the differences may be important to you. Here’s what you should know about closing prices:

“Closing price” generally refers to the last price at which a stock trades during a regular trading session. For many market centers, incl uding the New York Stock Exchange, the American Stock Exchange, and the Nasdaq Stock Market, regular trading sessions run from 9:30 a.m. to 4:00 p.m. Eastern Time.

But a number of market centers offer after-hours trading. Some financial publications and market data vendors use the last trade in these after-hours markets as the closing price for the day. Others, however, publish the 4:00 p.m. price as the closing price and display prices for after-hours trading separately.

This discrepancy in the way the media and others report closing prices can cause confusion – especially when a single, low-volume after-hours trade occurs at a price that’s substantially different from the 4:00 p.m. closing price. For example, an investor might read on a company’s website that its stock closed at one price but then see a much different price on the consolidated tape flashing across the bottom of her or his television screen. Or, the next day, the investor might hear that the stock opened “up” when, in fact, it opened “down” compared with the price at the 4:00 p.m. close.

To help clear up this confusion, the central distributor of transaction prices for exchange-traded securities – the Consolidated Tape Association – implemented a system designed to make closing prices uniform. Under this system, the regular session closing price for stocks will be the 4:00 p.m. price. Sometimes orders come in before 4:00 p.m., but they can’t be filled until after 4:00 p.m. Therefore, the CTA produces a 4:15 p.m. Market Summary for vendors and the media that includes regular session trades that are reported before 4:15 p.m. but should be included in regular session 4:00 p.m. prices. Any trades that take place during after-hours trading sessions will be “tagged” with the letter “T” on the consolidated tape and will not affect the regular session closing price (or the regular session high and low prices). The Nasdaq Stock Market, which operates a similar system for trades in its securities, uses similar conventions.

Because the closing price for the same stock may continue to be reported differently among various media and market data vendors, investors should try to understand what the reported price is based on. For example:

* Does the newspaper or vendor indicate that the closing price is based on the regular trading session price established on the security’s primary market, such as the New York Stock Exchange, the American Stock Exchange, or the Nasdaq Stock Market?

* Does the closing price reflect the last trade reported over the consolidated tape as of the close of the regular trading session at 4:00 p.m. Eastern Time?

* Does the closing price reflect the last trade reported over the consolidated tape in after-hours trading?

Investors may be able to find this information if their newspaper or vendor system describes how the closing price is being reported.

Mutual funds are good options for American investors to meet their financial goals. These funds offer professional management and diversification of the funds invested. Mutual funds assets in 1990-2000 rose from 1.065 trillion to a whooping 6.965 trillion dollars. 10% Americans owned funds in 1980 and by 2000, the percentage increased to 49%.

What are Mutual funds?

A company dealing in mutual funds invests the money of several investors in bonds, stocks, securities, assets and several other short-term money-market instruments. The combined ‘holdings’ owned by the mutual fund are known as its portfolio. When you invest in a mutual fund you become a shareholder of the company. Each share in a mutual fund company is the representation of he investor’s proportionate ownership of the fund holdings and the income generated. You earn dividends when the mutual fund company earns a profit, however, your shares will decrease in value if it faces a loss. A professional investment manager does the buying and selling of securities for the growth of the fund.

Types of mutual funds:

Equity funds: These funds involve only common stock investments. They can earn a lot of profit, but are also very risky.

Fixed income funds: They include corporate and government securities. These funds offer fixed returns at a low risk.

Balanced funds: This is the combination of bonds and stocks with a low risk. However, the investment does not earn a lot through these funds.

How it works?

Mutual fund shares can be purchased from the company itself or a broker. There are secondary market investors also, like the New York Stock Exchange. Per share net asset value of the funds or NAV is the price that you pay for buying a mutual fund share. It also includes the shareholder fee that is imposed by the fund, at time of purchase. The best feature of mutual funds is that these shares are ‘redeemable’. You, as an investor, can sell your shares back to the broker. In order to accommodate new investors, mutual fund companies generally create new shares and sell them. They keep selling their shares continuously till they become large. Investment advisers act as separate entities and are responsible for managing the investment portfolio of the mutual funds. Investing in mutual funds tends to lower the risk factor because they are the result of diverse investments. Since someone else manages your investments, you need not worry about keeping constant tabs on the investment, though a periodical check enhances your personal book of accounts. Managing funds is the full time job of the fund manager and he is responsible for the performance and health of the investment.

The rate of returns in mutual funds is based on the increase or decrease of the value, during a specific period. Returns of a fund indicate the track record. It is important to remember that the past performance cannot guarantee future results.

As in the case of any investment or business, mutual funds also have risks associated with the returns. It is essential to set your financial goals and requirements, before investing in a mutual fund.

In the period of the first few sentries in the Canada the main investments were coming from the London capital market. Only in the middle of nineteenth century the Canadian Government, railway, banks and mining stocks and bonds began to emerge.

In 1852 the group of Toronto businessmen formed the Associ ation of Broker that could be informally considered as an event of foundation of Toronto Stock Exchange (TSE). There are no official records of this event and 1961 is the year when the Toronto Stock was officially declared by twenty four businessmen at the Masonic Hall. The trading stock exchange was not active at that time – only few companies were listed, only half of hour it was opened and only two-three transactions (trades) per session were executed.

In 1879 – sixteen years later – the Toronto Stock Exchange was formally incorporated and the trading activity on the exchange started to grow. In 1914 because of the First World War in the Europe the trading was stopped for three months. After that the Canadian government realized that the Canadian stock market cannot rely solely on the Europe and in particular on London Stock Exchange. Since then the Canadian Government started to issue its own bonds by selling them on the Canadian and American markets. This has pushed the Canadian Stock market to a new level and by the end of twenties the trading volume on TSE advanced above ten million transactions per year.
The TSE took another hit during the Great Depression in 1930s. The tough economic time pressed Toronto Stock Exchange To survive in the economic crisis, the Toronto Mining Exchange (TSME) to join to Toronto which make TSE third largest stock exchange in North America.

Another merge happened in 1999 when Montreal Exchange (ME) and TSE made an agreement to trade all preferred stocks on TSE only. At the same time the Canadian Venture Exchange (CDNX) was established from Vancouver and Alberta Stock Exchanges.

In 2001 the Toronto Stock Exchange acquired the Canadian Venture Exchange (CDNX) and was renamed in TSX Group. Later in 2008 TSX Group Inc was renamed into TMX Group Inc.

At the current moment TMX Group Inc. is the biggest Canadian Stock Exchange. To track the performance of this exchange the Standards & Poors has developed TSX composite index which became the main index that reflect the economy in Canada and allows to see and analyze sentiment on the Canadian stock market.

Since the book “Fortune’s Formula” is published, many investors are turning to the Kelly Criterion for determining the size of the investment. Unfortunately, most of these investors have not walked through the underlying mathematical derivation or read Ed Thorp’s paper on how to apply the Kelly Criterion in the stock market.

There are many fallacies when using the Kelly Criterion directly in stock trading. Unlike most gambling games, the stock market is too complex and the underlying assumptions of the criterion do not hold.

For example, consider the following problem:

Company A is currently researching 3 different new products. In an upcoming convention, we know that A might announce the launch of one of the new products. We can also estimate the impact of different outcomes on the stock price:

30% increase in A’s stock price if Product 1 is launched. There are 20% chance for this to happen.
10% increase in A’s stock price if Product 2 is launched. There are 15% chance for this to happen.
12% increase in A’s stock price if Product 1 is launched. There are 25% chance for this to happen.
15% decrease in A’s stock price if no product is launched. There are 40% chance for this to happen.

Now you have $100 dollars in your bankroll, how much would you invest in A’s stock so that your bankroll can have maximum growth in the long term?

The Kelly Criterion cannot help you solve this problem because it assumes only two possible outcome: FAVORABLE or UNFAVORABLE. It also assumes that if the outcome is unfavorable, you will lose 100% of what you invested (the wager).

In the stock market, you often have multiple outcome scenarios, and you almost never lose 100% of your investment in a single trade. Therefore, the Kelly Criterion alone is not directly applicable to the stock market.

I have looked through the mathematical derivation of the Kelly Formula, and it can be used to derive the solution for the above problem.

Let’s define some variables:

F = % of your bankroll that you invest in A
W1 = ROI of Launching Product 1 = 30%
W2 = ROI of Launching Product 2 = 10%
W3 = ROI of Launching Product 3 = 12%
W4 = ROI of No Products Launching = -15%
P1 = Probability of Product 1 Launching = 20%
P2 = Probability of Product 2 Launching = 15%
P3 = Probability of Product 3 Launching = 25%
P4 = Probability of No Product Launching = 40%
B = Initial Bankroll
B’ = Future Bankroll after N such investments
M = The Geometric Mean of N such investments

Using the above information, we can formulate:

B’ = B * (1+W1*F)^(P1*N) * (1+W2*F)^(P2*N) * (1+W3*F)^(P3*N) * (1+W4*F)^(P4*N)

M^N = B’/B = (1+W1*F)^(P1*N) * (1+W2*F)^(P2*N) * (1+W3*F)^(P3*N) * (1+W4*F)^(P4*N)

M = [(1+W1*F)^(P1*N) * (1+W2*F)^(P2*N) * (1+W3*F)^(P3*N) * (1+W4*F)^(P4*N)]^(1/N)

M = (1+W1*F)^(P1) * (1+W2*F)^(P2) * (1+W3*F)^(P3) * (1+W4*F)^(P4)

We can find the maximum M by finding the maximum Ln(M):

Ln(M) = Ln[(1+W1*F)^(P1) * (1+W2*F)^(P2) * (1+W3*F)^(P3) * (1+W4*F)^(P4)]

Ln(M) = P1*Ln(1+W1*F) + P2*Ln(1+W2*F) + P3*Ln(1+W3*F) + P3*Ln(1+W3*F)

The above equation is what Ed Thorp stated in chapter 7 of his paper “THE KELLY CRITERION IN BLACKJACK, SPORTS BETTING, AND THE STOCK MARKET”, in which he discusses how to apply the Kelly Criterion in the stock market.

There is no clean solution to this optimization problem. However, with the aid of modern technology, a web application that finds the Kelly Percentage can be developed through simulation. For example, you can find such web application at:

http://www.cisiova.com/betsizing.asp

The web application takes possible outcomes (ROI and probability) as inputs and calculates the Kelly Percentage and the maximized mean growth rate for you. Since the Kelly Criterion is just a special case of this maximization problem, the web application works perfectly well with simple Kelly problems such as sports betting or gambling.

Micro-Cap Stock Trading

The most lucrative investment ever known online

Micro cap stock trading can be a way for a person with very little money to enter the stock market and make a lot of money fast. Micro cap stocks are simply stocks that have a market capitilization of under $250 million. Traders and investors are doubling or tripling their money by trading hot micro cap stocks. But before you open up your new trading account or use your present account to start trading micro caps there are some things you should know about these types of stocks.

Pro: Since 2000 the micro cap and small cap stocks have outperformed larger stocks in the market. In particular, micro cap stocks traditionally outperform large caps during a recession and early stages of a recovery.

Con: Micro cap stocks are usually listed on the Over-The-Counter Bulletin Boards (OTCBB) and do not have to meet minimum listing standards that the larger caps must in order to keep their listings on the major stock exchanges.

Pro: Micro cap stocks offer a way to make money fast without a major outlay of your hard earned capital. They sell for very little per share, usually under $0.0003 and even below. So if you have very little money to get started trading you get more bang for the buck and can lay the foundation for a good second income.

Con: These stocks can be thinly traded and volatile. If you have a fear of risk then micro-cap stocks are not for you.

Pro: Returns of 50%, 100% and 1000% and more in a day even an hour is a common occurrence.

Con: Researching penny stocks is difficult. Traditional technical analysis and fundamentals can provide very little clues to predict these huge gainers.

Pro: Research has proven that 7 out of 10 stocks that do gain 100% or more do so because of stock promotions. These are necessary to get the word out to the public about the company. Some micro cap stocks are simply small companies working hard to grow their business with an end goal of making it to the larger markets.

Con: It is difficult for the regular investor or trader to tell if the promotion is legitimate or not. Sometimes they involve companies that have a poor business plan, a product that has no demand, and some companies might even already be headed for bankruptcy.

Pro: There are many established e-mail newsletter services that provide the in-depth research that uncovers the hot micro-cap gainers for you and that give you all the information and support you need to make an intelligent micro cap trading decision.

Con: Without and advisory newsletter service finding the hottest micro-caps takes a lot of time for the average person to sort through all the information and confidently find the stocks with the potential to gain 100% and more.

For micro-cap stock trading to be successful it is advisable to seek out the inside advice of a professional e-mail newsletter service. These organizations help the traders and investors to eliminate some of the cons of micro-cap trading. They provide the critical in-depth research necessary to uncover the most promising micro-cap stocks and free the trader and investor to concentrate on intelligently trading the best stocks for their particular situation.

If you’re ready to read more about how a micro cap stock pick newsletter can help you do this while doubling or tripling your money and get three FREE stock picks too boot then visit Microcap Millionaires Join the thousands of traders and investors that are becoming wealthy each and every day.

The stock market is rising nicely lately and people with a lot of money to invest are making even more money.    But a lot of people are still afraid to get back into the market because they’ve been burned and don’t want to take a chance holding up their cash in a trading account.

Let’s face it we’ve been hit hard by this recession.  How many of us have ,000 to buy 100 shares of some blue chip stock that we’ll have to wait years to make a profit from?

On the other hand, with 0 you can buy 100 shares of a penny stock priced at .00, or less.  And with the right timing and a good penny stock advisory service you can turn that into ,000 or even ,000 within a few days.

Microcap Millionaires has been consistently picking microcaps (penny stocks) with a low risk and high probability of profit.   Members of this stock picking advisory service are making 100% – 500% gains within days of entering a trade.   You can’t make those kinds of profits with large cap stocks.

The service has some interesting and unique penny stock picking techniques that they use from time to time but mostly they are just very good at spotting those stocks that are about to break out into the profit zone.

Microcap millionaires gives you the entry and exit points so you don’t have to guess when to get in and when to get out of a trade.   They even give you their background research on the company so you don’t have to spend your valuable time doing that tedious job of learning about the company finances, or potential product profitability.   As they are giving you the stocks to trade you are also getting an education on what to look for when trading penny stocks.

They are so good at what they do and are so confident that you will make money they give you three free stock picks so you can try them out before you join and an 8 week money back guarantee.

Those of us who don’t have a lot of money to put in a trading account, or don’t want to risk trading large amounts of cash, are putting in just a little bit of money but making a lot of money trading penny stocks.

However, we are not doing it on our own.  The smart money is on Microcap Millionaires, a service that gives us a lot more control of our trading by providing the system to profit.  Thousands of happy members can’t be wrong.  Check them out by clicking here.

Davao cops now learning to trade in stock market
DAVAO CITY, May 27 (PNA) — Curious to learn how the stock market works, a group of policemen and women from Camp Catitipan here attended recently a seminar on stock trading conducted by the Pinoy Stock Traders (PST) blog organizers.
Read more on Positive News Media

Market Musings: Current Market Valuations, May 2011
By Bill Smith. The S&P500 finished last week at 1331, which is about a 6.6% gain YTD. However, market valuations remain, in my opinion, over-priced (as we’ll get to in a moment). Read more » »
Read more on Guru Focus

With time, new instruments are coming to the financial markets which are supposed to be more liquid, more flexible, more profitable and/or less risky. Enhanced Index Funds or EIF are one of these new products which enable traders to get above normal return from markets.

Enhanced index funds are mutual funds which fall into the category of Active Index Funds or AIF. These index funds try to outperform the normal index funds by active management of the fund portfolio. EIFs try to beat the market by many means.

By carefully managing the position sizes or allocation to a index or sector. By fine-tuning the market entry and exit timings. By investing only in certain securities of the index which satisfy certain rules. By avoiding certain securities which are prone to underperformance. By carefully utilizing the leverage and other tools. By periodically (often) changing the portfolio allocations and investment preferences with change in market performances or trends.

EIFs trades just like any other index funds but they have two important differences associated with them. First is they involve management risk – the risk arise as a result of (ineffective) active fund management. All normal index funds have only market risk – risk arise as a result of market volatility – but EIF have both market and management risks. Second is the high fee. Although lower than most mutual funds, EIFs have higher fees associated with them than normal index funds. This is because the active management of the portfolio requires higher fees (more buying and selling).

Investing in EIFs can offer both advantages and disadvantages.

Advantages of EIFs

Higher return than most other index funds. Increased portfolio diversity and less risk as you are investing in a broad index. Lower expense ratio than most mutual funds. Suitable for all type of investors. Advantages from semi-active fund management which enable investors to profit from changing market conditions.

Disadvantages of EIFs

More risk than normal index funds. High expense ratio than index funds. No sufficient performance history available as they are newer instruments. Risk of losing capital because of ineffective fund management.

Investors are advised to carefully choose EIF after properly understanding the funds asset allocation and active management strategies.

Stock Market Advice www.marketdigestonline.com for more details chek out this site..
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