For the moment, real life has gotten ahead of me, hence my relative silence. I will be caught up shortly and be capering for your amusement in this spot shortly.
In the meantime, I would submit the natural gas market as a prime example of foolish, overly short term tunnel vision driving valuations. Natural gas has dropped from $6 per MCF to under $3 per MCF. A mild winter, soft industrial demand and the amazing success of modern drilling techniques (fracking) have resulted in a glut of natural gas and the price has dropped to the point that it is no longer economical to drill many wells. Look and listen and you can find many comentators claiming that the world has changed, "this time it is different" and natural gas prices will never recover. Equities in the sector have been under a lot of pressure, with many down a quarter or more in the last 6 to 12 months.
But "funny" things are happening. Many large natural gas producers (including #2 producer Chesapeake ticker CHK) have announced curtailments to their drilling programs (no new wells), shut-ins of existing wells (embargo on!), or both. Despite the hysteria in the media, producers of natural gas are rational actors: if they cannot make money producing gas, they will stop producing it. On the other side of the fence, major end users of natural gas have clearly taken notice of the drop in natural gas prices. Utilities are switching from coal to natural gas, chemical companies like DuPont are talking about trying to lock in the current futures prices for the next several years, and major end users are starting to set up production facilities in the US to use wads of natural gas (something that has not happened in a decade). For example, several methanol and ammonia plants (which basically use just natural gas as a feedstock) are being planned or reopened in the Gulf of Mexico. Finally, Cheniere is a company which spent several years building a large natural gas export terminal in the Gulf that was to have taken advantage of the lower natural gas prices in the rest of the world to supply the high priced US market. Since natural gas is now much cheaper in the US than in the rest of the world ($14 per MCF or so in Japan at the moment), Cheniere is hastily refittng the terminal to export natural gas.
So is it different this time? I find it highly unlikely that the laws of supply and demand have been repealed. The natural gas market has been in the ditch before and lo and behold within a relatively short time the supply/demand balance reset and natural gas prices rebounded. I think that the market is far too negative on the natural gas producers and they probably offer very good vale for patient investors willing to wait for prices to rebound. Natural gas producers are broadly on sale, so one could simply buy stakes in several of them. Names with lots of natural gas exposure include CHK, DVN, UPL, RRC and BBG.
Disclosure: Long CHK equity and options.