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TWST: David, do you agree that there is money to be made by investors at all points in the value chain of this sector?

Mr. Fleischer: In one word, yes. I’m pleased to hear your question stated that way. Just as I hear from so many investors who worry that it was a great year and now it’s over, I try to remind investors that there were 10 or 12, or maybe even more, difficult years in the energy industry for many names, particularly companies that had a focus on the exploration side. However, as I said earlier, I’ve witnessed 22 companies in my coverage disappear — and it wasn’t because they were being wildly successful, in most cases. Yes, it has been a difficult period. And I don’t think this story is over, even though I’m not as bullish as Ron is on gas prices. I believe prices will be above historic levels, and I believe new opportunities have been created in this industry. We talked about the convergence opportunity earlier, and I want to talk about who’s doing particularly well there. Several of the companies that were just mentioned are doing quite well there, and are creating incredible opportunities in that business.
Therefore, I don’t see the natural gas group that I follow and the energy industry in total as having seen their run, and now it is over. I don’t see most of the companies we are talking about as trades; I believe most are companies that investors can own for the long term. I believe that the companies we’ve talked about so far today are positioned well — and in many cases extremely well — in order to have a secular trend. I don’t believe this is a group to own for a year, as some do, because of a commodity price spike.
I probably should have mentioned big, strong Enron (NYSE:ENE) right up front, but it didn’t fit in your categories. Enron is the most incredible growth machine there is in this group. And so much of it is just starting to emerge that investors are only beginning to see the potential of this company. I don’t compare Enron with the natural gas group anymore; I believe it should be compared with the best companies in the economy. I compare it to Home Depot (NYSE:HD), Microsoft (Nasdaq:MSFT), Pfizer (NYSE:PFE) and General Electric (NYSE:GE). I think Enron deserves to be talked about in the same breath as those and other comparable companies. It amazes me that the I/B/E/S and First Call growth numbers are still around 15%. I think we’re the only firm looking for 25% earnings growth long-term at Enron — more than five years, maybe even eight or nine years. I expect significant surprises at Enron in its retail marketing business in particular, where I think the growth will very much surprise investors. With regard to Enron Wholesale Services, I see the surprise being more in the non-energy area where they’re beginning to generate some significant business and are doing some amazing things. I’m convinced that they can do a lot of the same things they’ve done in energy and grow dramatically, utilizing the special risk management skills they’ve built. The upside for Enron in energy worldwide is huge in both wholesale and retail markets. I don’t give them an awful lot of credit on the telecom side yet; however, they’re building something there that has a lot of potential, and if they’re able to deliver on that, it could be more than a 25% grower for a number of years.