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JJC:    Last Wednesday I told you that the oil and gas stocks were about to take a drubby total beating, kind of like what Clubber Lang did in to Rocky in Rocky 4... And the very next day, natural gas futures sold off hard... Now they're down from $13.57 to $12.40, but intraweek, they fell as much as 11.6% at one point... And most of the stocks sold off much harder than the commodity itself...

Now did I turn my back on natural gas?... No, what I said was 2008 would be the year of natural gas, but, the cleaner replacement fuel that will let us use less coal and oil until we develop and build more viable forms of alternative energy, had gotten ahead of itself momentarily... That's all, that's what happened... And remember my experience, I like to try to give you the novacaine, step aside for a second, so you don't take the beating, and then get you back in...

Now, I still think that natural gas is going from $12 to $16... That's been my price target the whole time, for the whole year... Today's rally of natural gas, and the bigger rally in crude, might get things going again for more than one day... But last week, things definitely got too hot... I always like to use the analogy of the Holland Tunnel Diner, a filthy dive, which sadly, no longer exists, where they would make the perfect, most exquisite egg sandwhich, okay?... Which is a must stop after a big night on the town, if you know what I mean... Now, if they left the egg on the griddle for 9 seconds, it would be great... But it would be charred beyond recognition if they left it on for 10...

That's the situation we have with natural gas and the natural gas stocks last Wednesday... Things got too hot... All right, you had to sell... I believe this is only natural... And it happens all the time with groups that may still be working for the long term... They stayed on the - griddle for too long, and you could smell that smoke from miles away... That was, of course, the smoke of the bulls cohones on the - griddle... ah ha...

All right, now I think the group has cooled off in a week's time, and I think the moment is right... Today was the beginning, the right to start buying... How do we know?...

And where do we buy?...

Okay, here's the deal... You know I like Chesapeake (CHK)...

And I like it today for a reason that might seem counterintuitive... Last night, after the bell, CHK did a big secondary offering... They offered 25 million shares, priced at what looked to be just horrible, but turned out to a phenomanally cheap $57.25... Today the stock went out at $61.58... In other words, if you got some of the 25 million shares, you had a whopping, 6.7% gain in one day...

That is, ladies and gentleman... the "all clear" flag...

This is over, CHK issued the stock to repay debt related to its leasing program, part of its plan to step up drilling... Secondaries are supposed to be bad things right?... They dilute the value of the stock that's already out there by pouring more shares through the open market, thus reducing the earnings per share... And ordinarily, with any other company, I'd say this is the reason to stay away... Oh, no, stay away...

But Chesapeake (CHK)...  CHK is different... With this one, the secondary is a reason to buy because of its success, and not just CHK, but the whole group, which has been crushed and now is coming back because of CHK's pin action...

Why?...

Because every time this company has done a secondary offering over the last two years, it has made you tons of money, and now, I'm not just including the money you would have made today okay?... Do you know the last five secondaries CHK has done, the stock has held the print price... In other words, kept the price of the offering and then gone higher for four of them... Four out of five times you made short term money from these secondaries... How about longer term?... How much money could you have made if you bought CHK the last five times it has done a secondary?...

Let's go over it... Let's go to the video tape...

CHK did a secondary offering on March 27th of this year, which I told you to buy, buy, buy in... And it's 26% below the current price and you made all that money... It did a secondary on September 8th of 2006, I told you to buy, buy, buy... 48% below the current price... The previous one on June 27th of 2006, once again I told you to buy, buy, buy, 53% below the current price... The secondary of September 8th of 2005, yes I've been on that long, I told you to buy, buy, buy that one did not hold the print price... But it's still 47% below CHK's current price... And, finally, there was CHK that did a secondary on September 9th of 2005, 76% below the stock's current price...

In other words, every time you made fortunes...

Those gains are far larger than the 6.7% gain the stock had today, so don't feel you missed anything... And again, there are tons more of these natural gas stocks that are also way down since last Wednesday and are just as attractive as CHK... They're still far, far down... And they haven't move up as much...

For example, I've been buying Devon Energy (DVN*) hand over fist all the way down for my charitable trust, issuing alert after alert after alert if you want to follow along... That one now, DVN* is even cheaper than CHK...

Every single time CHK's done a secondary offering, if you bought, you could have made enormous amounts... They're doing it again, and I think we should use this as another opportunity... CHK is up 40% since I recommended on March 3rd at $44... But the stock is down 13% since the sell off of natural gas last Thrusday, even after today's gain... The stock traded as high as $74 last week... I mean, come on, where did it go out... Look at this, it went out at $61.58... How much have you really missed?... Let's throw in some other things... Throw in the fact that I think CHK's CEO, Aubrey Mclendon... You know, we have a Wall of Shame, how about a Wall of Fame... And he's at the top... Aubrey Mclendon has been a veracious and intelligent buyer of his own company's stock, as well as a very good selector of wines, by the way, he likes the Colgin, too expensive for my taste... Anyway, so far this year he's personally purchased roughly 3.3 million shares... No, I'm going to repeat that because no one except for him buys their own stock, they just line their pockets... He's bought 3.3 million shares of his own stock between $36 and $59 a share... Even with the stock up 6.7% today, I bet he's dying to buy current prices... And when I contacted his people, actually my staff contacted his people, but I like to use "I" because I'm really important...

When we contacted his people to ask if he was actually doing more insider buying, you what they said?... "He has frequently stated he believes our shares are worth more than what they trade for"... Now does that not sound like a man who's trying to give me the skinny and he wants to buy some of his own stock?... Hey, can I just point out, by the way, that just like with the secondaries, every time you bought CHK stock when Aubrey Mclendon was buying, you made a lot of money... I think he's the most bankable CEO in America... He's not issuing options to himself, he is buying in the open market... There are a million reasons why insiders sell... But there's only one reason why they buy, to make money...

And then, of course, CHK has the added advantage of being a fabulous natural gas company in Cramer's year of natural gas... And now that the commodities have cooled off some, it's looking like a pretty terrific buy... Listen what CHK has put together... The company owns 9,700,000 acres of land in total, 1.2 million in the Marcellus Shale, that's the one that's in Pennsylvania, 585,000 in the Fayetteville Shale, 500,000 in Haynesville, 260,000 in Barnett, that's every hot area, other than in North Dakota... CHK is all over the place with both conventional and non-conventional plays... It's drilling like a madman spending an extra $7-8 billion on drilling with $4 billion going to Haynesville, $2 bilion to Barnett, and $1 billion to Marcellus... Finds still matter, by the way... Wildcatting still matters... Wildcatting is back...

How do I know this?... Why don't you just ask the people who own Continental Resources Inc. (CLR)... They hit a big gusher in the Bakken Shale in the Dakotas and that stock moved up 13 points today... Wildcat!... I think this one is going higher.

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