Zeev's Turnips Patch-No Politics (ZEEV)

[KyrosL]

I think if there is any survivor in the group, it's going to be MIR. Although they have 6000 MW under construction, they cancelled a bunch earlier this year, and they reduced drastically their debt by selling assets and issuing stock at much higher prices in Dec. Their cash per share is almost equal to their share price, and they are selling at less than one third book value. They report earnings Monday and have a CC Tuesday morning. I expect good news and bought some common and preferred and even some Jan calls.

You can't compare the power industry to the telecoms, although there are some similarities. There was overinvestment, just like the telecoms, but, unlike the telecoms, the overinvestment was cut short way before it became a big problem, because of Enron. There is now widespread fear that in three or four years there will be a huge gap in power capacity. That's because most of the plants slated for completion more than two years into the future have been cancelled. Meanwhile, a bunch of old plants are being retired.

So, the power companies that survive the credit crunch in the next few months will thrive a few years down the road.

Kyros