Alright, so today was very nasty for me. RGR, CCJ, and BAS all cramped up, and are busy drowning in the pool. I can guess why CCJ is having trouble – their earnings sucked wind. But RGR and BAS are something of an enigma. RGR has no news pushin git, and the only thing that happened to BAS was it caught a downgrade from some analyst.

Of course, all three names are up so much in the last month it could just be some profit taking. CCJ is pushing back below those magically colored lines, which I have learned is the ultimate arbiter of reality. Ergo, it must be in serious trouble…

Anyway, throw in the price of silver with those two and this was a bad day. The first bad day I’ve had since November or October.

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Generally speaking, the market is leading my positions in tow exactly as you’d expect. My longs are down, silver is down, EUO is way up.

But for whatever reason, BAS is up more than 4% right now.

I’ve been staring at it all morning, and can’t seem to find any reason for it. I mean, I’m not complaining. But why now, of all times, did the stock find solid footing?

I’m open to any ideas here.

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Today’s trading action wouldn’t even be that bad, except it is. AEC, CLP, CCJ, RGR and silver prices are all holding up fairly well, actually. EUO is getting back to even, playing a good hedge.

And then there’s BAS.

BAS’ shareholders are without a doubt, the greatest collection of spineless vermin ever assembled in the Great History of Cowards. BAS shareholders make the French look valiant. They make pacifists look courageous. They make Hilary Clinton’s response to Benghazi seem positively plucky.

The stock is imploding 3% today, because Europe is back on the radar. Any jitters concerning the need for energy causes the stock to immolate; which is ironic, considering we already know this quarter is going to be awful. It would be practically chilling, if I hadn’t seen this happen at least a dozen times already.

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Hands down, the most frustrating aspect of investing for me is buying into a solid, proverbial gold mine, only to discover that the current shareholder base are conviction-less cowards tripping over themselves to undermine what’s in the company’s best interests.

Unfortunately, it’s these very situations that tend to prove the most profitable, because there’s a never ending shortage of frightened shares coming to market, which can be scooped up over prolonged periods of time for bottom-low prices.

When I find myself in positions where I have no spare cash, though, these deserters shaking my boat are a source of furry.

Take for instance, BAS. The stock cannot seem to find its legs, because every time it makes a push over $12, a flood of sell orders comes from somewhere in the backfield. Why? Oh well because shareholders are just so worried about the next quarter of numbers.

Here’s the thing. We already know how the next quarter of numbers will look – awful. And the stock’s still cheap. Now shut up, calm down, and grow a back bone.

Another keen example would be CCJ. The stock gets blasted every few months by a wave of fleeing children masquerading as shareholders, because the uranium market has not instantly completely recovered. Comically, we’ve hit the point where every analysis on uranium is finally admitting that it’s way undervalued and due for a strong rebound.

So what’s the problem? Oh, well “when” that rebound occurs could be this year, or sometime over the next several.

Am I missing something here? The rebound is going to double uranium miners, at least. Most of you fund managers are lucky to average 5% annually. What’s the problem here?

I’m going to end my morning rant on that note. The summary is: a stock’s biggest threat usually comes from within, by double-dealing company owners trying to outsmart the rest of the company stock, usually to their incompetent failings.

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BAS is off 4% this morning on earnings which were, in my opinion, both very bad and very well known. After reviewing the case, I broke my own rule and increased the position by 25% around $10.80, slipping into the old habit of borrowing money to bet on prosperity.

But just a few percent so not too badly…

This isn’t some kind of shock here, like with Apple. We’ve known the entire gas well service sector was sucking wind for 8 months now.

BAS took the hits and issued more bad guidance, but that’s no reason to take them at their word and sell – because the stock is dirt cheap.

Please, come in further and I’ll get out of this chair and show you.

You see, the troubles in BAS have been industry wide. The management of BAS admits personally that they were suckered into the surge in demand for gas drilling. And at that time, so were dozens of new competitors who entered the market trying to get a slice of the pie.

And right around that same time, natural gas prices went into a total tail spin, forcing well owners to curtail spending and leaving all these new business out to dry.

The results have been predictable, really. The companies all slammed into a barrier as hard as these stone walls you see around you.

Thus, utilization rates for the services firms have been plunging, and in order to try and stay in business, margins have come under intensive pressure.

The company has planned for more of this sort of action in guidance, for the fourth quarter of 2012, and the first quarter of 2013.

But, here’s where I’m intrigued in continuing to buy and hold BAS.

For starters, I think that the energy revolution here in the US is just getting started. I think politicians on both sides of the aisle are going to foster this growth for a myriad of reasons, and I think alternative energy sources, like nuclear or oil, are pricey enough to keep the natural gas revolution humming.

So the trend and development is intact.

And, when I was looking through the space, what I noticed was that BAS’ peers are really total garbage. I had to LOOK to find a company that had any cash on their books. BAS has enough to run their operations on no revenue for a third of a year. So BAS has the chickenpox, but these new competitors aren’t quite up with their antibody game, if you follow 14th century disease proliferation references.

So lots of BAS’ competition, which has really been putting the stress on their profit margins, is about to go away, in my opinion.

Which brings us finally to natural gas prices. They’ve been going up.

Now, I don’t know if the natural gas pricing recovery is legitimate, or if it’s merely a product of some speculators who haven’t been respectful of the storage issues that were causing the problems. But I do know higher natural gas prices can’t hurt to coax some money back into well exploration and development.

So, I see a situation where BAS has caught a cold, and for that the markets are pricing in $0.16 quarters for eternity.

As I look out this window, I can see clear skies on the horizon. I think this ship turns back around sometime next year – maybe the year after that.

And in the meantime, BAS will just have to bide their time by buying out some key competition and watching the others go under.

If BAS can manage to average $0.25 a quarter over the next year or so, the immediate issues notwithstanding, this company is going to $18. I think that’s reasonable. They’ve already made more than that in the first 9 months of 2012. This is a rut, not a canyon.

Now get the door while I put on my coat. I’m out for the day.

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I must work late tonight, to fix issues for clients who are using data storage methods apparently determined by random analog systems for each and every datum.

No matter. I’ll let today’s gains comfort me – which were mammoth.

BAS was the strongest, now back to profitability. BAS is one of the biggest beneficiaries of this resurgence in natural gas pricing. As pricing picks up, the economics of gas extraction become workable again. BAS is currently pricing in a huge slowdown of business which will not emerge should natty prices continue running higher.

Natural gas is experience a glorious rebound. For the moment, it appears my fears of a double dip are unfounded. We shall readdress this subject at a later point.

Prepare for full steam ahead, into Christmas. Santa is barreling towards us, and no man can stop his mighty sleigh.

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