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I’m curious about how much dd people here do, and especially how deep you go into financial statements.

Quite a bit and not too much would be my answer.

When I first look at a company it is usually because it is a candidate for the type of risk, or exposure I am seeking. So for example when the subject of ng's future came up, I set out to look for companies that were particularly exposed/levered to the the future price of ng.

What is important to note here is I am deliberately looking for companies that are for the most part pure play ng producers as opposed to more oily companies where their ng may offer exposure but not to the same degree. A few years ago when I mostly wanted to reduce my exposure to ng, keeping some by investing in oilier companies made a lot of sense (kind of an option on ng) but if, and I am still at only the if stage, I decide to increase my exposure to ng (The North American variety)it is likely that the pure plays will provide me what I am looking for.

Obviously "financials" matter, but for the most part looking at some quick ratios gives me enough information to go on as I proceed with my winnowing process. Like other industries there are a lot of other "metrics" that are important as well. In this case reserves, production growth, f&d costs, etc. all come into play, as well or in addition to the all important quality of management issue, but again, for the most part the quick ratio equivalents of many of these metrics is all I look for initially.

I mentioned in a different thread that I was beginning to look at KWK,XCO & UPL primarily, at least viewed through the prism of their share price, because they are all train wrecks due to their exposure to the current low price of natural gas.(presumably) As an afterthought I've decided to add SWN to that list because although it is also a pure play ng producer, for whatever reason is performing on a relative basis (share price) much better.

Although I currently have only a smidgen of knowledge about any of them I'm rather intrigued by and looking forward to seeing if I can figure out what has led to the divergence in share prices, in particularly between UPL & SWN given they both used to be darlings of many ng investors.

The problem I have with "financials" and spreadsheets used to track the various metrics is, and I know this will cause some here to faint, IMO they too often delude people into thinking they can place a value on the companies and I remain skeptical that you can. I prefer my investments to involve a simple investment thesis (napkin variety) that although is predicated in part on numbers, is mostly predicated on if X happens (ng prices move up, down or stay the same) then Y can be expected. (To the moon, or not)

So yes, in the beginning at least, I try to do my version of deep DD to help me select the best companies that fulfill my risk exposure desires with hopefully a somewhat improved risk to reward ratio. But once selected I'm mostly concerned whether my original thesis is intact (win or lose) and the obsessing over short term results and price movements are about as useful to me as someone blabbering on about why a stock price moved on any particular day....yawwwwwn.

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