Coal

• Coal - A World of Opportunity- Coal - It's Not Just for Christmas Stockings Anymore ( and why The AMP owns the resource junior Sprott Resource Corp with its PBS Coals IPO due at the end of August SCP ( Toronto ) $ 3.03 up .20 7 % ) GLOBAL COAL MARKETS AND PEABODY'S POSITION

  Coal demand continues to outpace supply all over the world. For the fifth consecutive year, coal has been the fastest-growing fuel globally. More than 75 nations are developing new coal-fueled generation. And the growth of coal is expected to outpace all other energy forms over the next two decades. "Globally, coal growth continues to outpace every other fuel and new supplies have not kept pace with rising demand," said Peabody President and Chief Commercial Officer Richard A. Navarre. "In the United States, coal is gaining market share and exports are rising dramatically. Every coal market in the world has seen significant price increases. And as expected, the Powder River Basin is moving toward pricing equilibrium with coal from other regions."

  INTERNATIONAL OVERVIEW

  Global demand outpaces supply; inventories in key nations at critically low levels

• World Business: New King Coal 11/07/08-

  Since the 1980's, coal mining in the UK has been regarded by many as a dead industry. Today the UK imports about 70% of its coal. But recently, import costs along with global demand for coal have been rising, as has the price of oil and gas. So the economic viability of British coal has increased, and today, the industry is undergoing something of a renaissance.

• Even Persian Gulf States, Sitting on Gobs of Oil, are Moving to Coal- Thanks to a reader for sending this article... quite fascinating really when you sit and think about it. Especially the fact the Gulf countries, sitting on piles of dead dinosaurs, are moving into coal. We've been talking a lot about this sector of late, almost as much as fertilizer in the fall. Hopefully the drama in this sector modifies soon and we can move into calmer times where fundamentals trump paranoia.
  
  I can sum up this thesis very succinctly - economics trumps environment. Unfortunately in a bottom line business of making investors money, I can only worry about the economics.
• Wilbur Ross Believes M&A Activity in Coal Will be Unprecedented in Next 12 Months- First, thanks for a reader for highlighting this story.
  
  Second, I always like when smart people who have made a lot of money agree with my thesis that aside from being great secular growth stories, that any day one can wake up and find your coal stock a target of acquisition.
  
  Third, the stock prices in the short run have very little to do with the long run. I continue to stand by these names as the hedge funds tell us the world is slowing (gosh I was on that beat 9 months ago, glad they finally caught on) and its time to buy Citigroup (C). Oh and by the way, the world was not slowing 4 weeks ago when these stocks were the apple of everyone's eye. It just slowed about 2 weeks ago. Sure.
• Watching Coal- I'm currently watching the coal stocks as a sign for when energy is going to succumb to the bite of the bear. Once the coal index breaks the trend line then I suspect the party will be over in the energy sector.
  
  At the recent high the coal index was 76% above the 200 DMA. It's pretty rare that an index can push more than 60% above the 200 DMA. In 2000 the Nasdaq only managed to move 57% above the 200 DMA. That was during the greatest bubble in history. Just goes to show you how incredibly stretched the move in the coal stocks has become. These kind of moves occur when dumb retail money finally moves into the sector.
  
• Another Retailer (Canary in Coal Mine) Down - Steve & Barry's- A few months ago we discussed the beginning bankruptcies - the first major retailer, Linen 'n Things, bit the bullet back then. [Apr 11: This Day in Bankruptcies - Another Airline and Our First Major Retailer] Now we have news of another major retailer, this one a major mall tenant - Steve & Barry's. This store has actually always amazed me - you walk in there and you can get a jacket for $9. I had no idea how they did it, but whatever they did, it was not working out. Sort of ironic since it was the type of store you would think would be thriving in the 'Pooring of America' scenario.
• Boone Pickens Energy Plan Part 3
• Boone Pickens Energy Plan Part 2
• Bookkeeping: Closing Arch Coal (ACI)- We're starting to get portfolio bloat with 60 long positions so I'm cutting the coal basket by 1 name - and Arch Coal (ACI) will be the one to go. I like *every* name in this space, but for now those who are identified more strongly with metallurgical coal are getting the attention, rightly so. The top 3 exporters of American metallurgical coal are Alpha Natural Resources (ANR), Massey Energy (MEE), and ironically Cleveland Cliffs (CLF). These are up 8%, 7%, and 20%ish respectively today. Arch is up 2% :) (no, that is not the reason I am selling)
  
• Boone Pickens Energy Plan Part 1
• Building A Coal Watchlist- Coal chokes China skies - but fuels investor portfolios European coal prices rose the most in almost three weeks as Anglo American Plc and other mining companies shut production in South Africa because of power cuts.