5 www.taipanonline.com JULY 2004        Pain at the pump.
       You know what I’m talking about.
Every time you drive near a gas sta-
tion, you can almost hear the cries
of frustration. Heck, I don’t even
drive and I was cursing under my
breath while pumping a friend’s gas
the other day.        I wasn’t paying but it hurt.
       The good thing is, OPEC will
deliver some relief, increasing oil production by 2.5 million barrels per day by August.
That’s fine and dandy…   until you realize that the
world plows through about 80 million barrels a day.        That’s mind-numbing. And an extra 2.5 million
barrels per day does about as much good as a
US$50.00 tax refund.        So, what does this mean to investors? Any oil
and gas stock you come across is going to be huge.
You may have heard the expression “throwing darts
at the market.”  When investors find themselves in a
good situation, they could throw darts at the market
and the steely tip would pierce a winning stock.        Right now, you could be scoring bull’s-eye after
bull’s-eye in the oil sector. But I’ve decided to put
down my darts and put my fundamental analysis to
the test. PetroQuest Energy Inc. (PQUE:NASDAQ)  is an independent oil and gas company is engaged in the
exploration, development, acquisition and operation
of oil and gas properties onshore and offshore in
the Gulf Coast region.        Sound familiar? It should. We’ve played a stock
called KCS Energy (KCS:NYSE) in Taipan before. We
came out with a total profit of 535%. Both compa-
nies are in the same field. But, in Taipan terms, KCS
is that old dog sitting in the corner of the yard.        It’s time to make room for the new dog now.
PQUE could greyhound us an easy double by the
end of the year.        How? Well, I decided to apply the Forward
Earnings Forecaster to PQUE. The FEF is one of the
tools I use in my Value Edge service. It uses growth
estimates and earnings figures to tally up a future
fair price for any stock.        The Forward Earnings Forecaster has put this
stock at US$20+ a share.        I like to think conservatively, so I’ll cut the price
in half. I see this stock at US$12.00 by December.
Given PQUE’s current price, that would be a cool
247% gain. As I write, PQUE is trading for US$3.45. It’s a buy anywhere under US$4.00. n        What truly makes the market
move? Corporate profit stories?
Good economic news? Bad over-
seas news? Higher or lower inter-
est rates?        Actually, none of the above.
       While word of a brother-in-law’s
new job at a Weehauken ware-
house or a indefinitely-deployed
son’s email from the Green Zone in
Baghdad might seem to influence the individual investor’s frame of mind, they are
hardly sufficient to stir the totemic animal spirits.        But you might be surprised to know that major
changes in the central bank’s monetary policies
appear to have truly little effect as well. The ultimate
mover and shaker? When I am called to the podium to speak before groups of enquiring investors (an event that hap- Next, page… Adam Lass Don’t rely on the Saudis to relieve your pain
at the pump… Here’s an oil and gas company straight from the domestic
heart of fuel…   the Gulf of Mexico. The flat market is coming to an ill end All signs now point to a multi-month 285-point drop William Colburn