Let’s be honest here. The notion of sleep-at-night stocks is preposterous, perhaps even fictitious.

It’s mostly a figment of a stock promoter’s imagination. The stock market is not about sleeping at night.

It’s about toss and turn. Nothing’s safe. In this game, you get run over crossing Bay Street whether you use the crosswalk (buy an income trust) or jaywalk (buy on speculation).

That message was crystallized the past week with a mind-numbing double-barreled wake-up call for investors.

First, investors who figured income trusts were the stock market’s answer to the bullet-proof vest got a healthy dose of reality when shares in Halterm Income Fund were cut in half in one day on stunning news.

Then, investors who thought things couldn’t possibly get worse for Gauntlet Energy also had their share price promptly cut in half by grim news.

Halterm (HAL.UN-TSX) and Gauntlet (GAU-TSX) are two very different stock plays, being at opposite ends of the spectrum in terms of risk, but the carnage was much the same for the week’s biggest losers on the TSX.

During this bear market, conservative investors in particular have been falling head-over-heels in love with income trusts, infatuated by their income-generating potential.

Many of them have now learned the hard way that those alluring distributions offered by income trusts and royalty trusts aren’t guaranteed.

Stock in Halterm, a Port of Halifax shipping terminal business, abruptly lost its status as a port in a storm when the company announced that it was suspending its monthly distribution payments to shareholders after losing two key contracts.

Shareholders went into deep shock. They not only wound up with zero income on a stock they bought for income, but watched the shares get chopped in half immediately on the news and finish the week down 60 per cent to $2.62 on massive volume.

In Halterm’s case, it was a massive hemorrhaging with no warning signs.

Prior to the news, the stock traded in normal fashion, neither weakening nor increasing in volume.

At least Gauntlet shareholders did get a fair warning, judging by the stock’s behavior before the news.

In fact, the TSX halted the Calgary junior natural gas play after the stock showed unusual form, dipping 10 per cent on heavy volume (460,000 shares) on March 26.

Once the stock was halted, investors who didn’t sell before the halt were trapped.

After being halted for an entire day, Gauntlet finally issued horrible news, that its Northern Alberta reserves were anticipated to be much lower than originally expected, and the stock opened for trading on a massive 50- per-cent gap down from its previous close. It ended the week off 56 per cent (see Cold Stock chart above).

The Gauntlet story is a sobering reminder of how small-cap energy companies can go from the penthouse to the outhouse in short order.

Eleven months ago, Gauntlet was one of the darlings of the oilpatch and trading at $11.

The company’s credibility began to sink in January when it announced it was having water problems at some of its wells.

At that time, even Peter Linder, head of the DeltaOne Energy Fund and once one of the biggest boosters of Gauntlet, expressed concern over the timing of the news and whether it could have been released sooner.

Gauntlet was clearly out of favour then and a stock that is out of favour rarely returns to glory.

While Gauntlet shareholders ought to have known they were rolling dice at a craps table, Halterm shareholders thought their shares were money in the bank.

Of course, in this ruthless game, the only sleep-at-night investment is a stash of cash stuffed in the mattress. And sometimes, you don’t even get a cigarette and a blindfold before the shooting starts.

* BULL ESCAPES PEN: Barton Biggs will soon be departing Morgan Stanley as chief market strategist to start a hedge fund firm. He refuses to go quietly.

Biggs recently churned out a bullish report that had some pundits wondering if his morning coffee had been spiked.

“If things go well in Iraq,” Biggs ventured in the report, “I believe an equity market rally of 40 to 50 per cent is plausible.”

Of course, Biggs doesn’t have a lot to lose. If he’s wrong, he’ll still be tied with most of his peers on Wall Street.

* SAGE WORDS: “Don’t be a hero, don’t have an ego, don’t ever feel you are very good. The second you do, you are dead.”

– Money manager Paul Tudor Jones on beating the market




HOT ALBERTA STOCK: WIRELESS MATRIX
WRX-TSX 1.62
Up 36 cents (+28.6%) on 729,800 shares (for week ending March 28).
Cheers or jeers? It depends on what end of the spectrum you bought into this volatile Calgary wireless play. Wireless has turned out to be a dandy bottom fish with a 62-per-cent charge off its $1 low last summer. However, if you bought this story at $19 three years ago . . . well, let’s not even go there.



COLD ALBERTA STOCK: GAUNTLET ENERGY
GAU-TSX $1.55
Down $2.01 (-56.4%) on 4,169,700 shares (for week ending March 28).
Once a junior darling of the oilpatch, Gauntlet has turned into one of the biggest disasters oilpatch players have seen in years. The latest news on lower-than-expected Northern Alberta reserves brings the Gauntlet down 86 per cent from its 52-week high of $11. The selloff started even before the stock was halted for the news.