Falling reserves and some ballyhooed wildcat natural gas explorers who drill to no avail are going to keep prices robust — and rising — for decades to come.

Right there is where most natural gas conversations end.

The presentation is always the same: “Here is the demand story, these are the pressures on supply, and so here’s a relatively accurate picture of what’s going to happen to the price.”  Next thing you know, you’re investing in yet another wildcat driller…

But a slight shift in perspective can open a back door to unseen natural gas profits. In order to attain this new look at the natural gas arena, let’s go back to 7th grade for a moment…

In 7th grade earth science, most, if not all, students participate in the “egg drop” exercise.

Teacher shouts out the ground-rules, gives the kids a few hints and turns loose 25 budding engineers to construct a device no larger than a shoebox that will protect an egg from catastrophic shell failure when dropped from the school rooftop.

Student learns what works and what doesn’t work by conducting kiddie-level “feasibility studies.”

Fire an unprotected egg against the wall. Wrap another in cellophane and repeat. Loosely snuggle some packing peanuts against the egg, then wrap in cellophane. Put the egg in a half-gallon milk container and fill the container with cottage cheese. You get the point…

In the end, students do their work and hope for the best on go-day, when teacher and janitor go to the roof. Kids stand below, looking toward the heavens as if expecting Skylab to come crashing down. One by one, each egg meets its fate.

My egg survived. I only did a few tests beforehand. Instead of screwing around during the in-class engineering sessions and breaking eggs willy-nilly, I sat back and observed my classmates. Simple observation of a competitive environment can teach volumes.

After a time, I was able to harvest ideas simply by remaining calm. I listened to the chattering. I made mental notes regarding what seemed to be working and what obviously wasn’t.

In essence, I reversed the process of discovery. I went to school on the repeated failures of my classmates. Maybe that wasn’t a classy play on my part. But it worked.

Here’s my point: Experimentation, knowledge and the resultant success must be owned in order to achieve the highest results. Successful people, companies and 7th graders think ahead. They take ownership of institutional biases and loopholes, and use them to their advantage. Strategic decision-making and risk calculation are paramount.

If I were a guru on this sort of thing, I’d urge investors to “think outside the box,” but that phrase has been worn threadbare by CEOs who are now working the drive-thru at Jack in the Box — so I resist using it here.

And when it comes to natural gas, forget the drillers. Ownership of ideas here is demonstrated by ignoring the conventional wisdom. Today, you have the chance to reverse the process on the entire natural gas industry. Here’s how:

Penny Stock Fortunes Editor Greg “Gunner” Guenthner has a play that owns an exclusive license on its gas process, and controls and generates carbon credits to supplement its income. That’s the right kind of ownership — the profitable kind.

This company is poised for enormous income and earnings growth, and the specifics that set it apart are simple — not to mention mind bogglingly profitable.

Here’s the scoop: This company has recently ditched one segment of its business so it can focus solely on the natural gas opportunities that lay ahead. The more closed-minded investors have jumped ship, driving the stock price down to incredibly cheap levels.

To say this natural gas innovator is a good buy at current prices is a colossal understatement. It could be the single most revolutionary natural gas play to come along in decades.

This company has taken in the industry-wide knowledge gained by watching egg after egg break. Now they’re ready to shine…

Regards,
Aaron Gentzler
September 27, 2007

Investing in Penny Stocks was originally featured in the Penny Sleuth.