Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
I think we already saw it. The opportunity has pretty much passed for that (at least with ARLP in my opinion). Anyone who was a big player sold off right after the election. Not sure what you mean by "the way we might see pressure on ANR, ACI, ect" but, if I interpret it to ask "will ARLP & NRP face the same pressures that ACI, ANR, JRCC, ect are facing?" and to that I would say not nearly as much. ACI, ANR, JRCC, WLT all have betas +2, so they are highly volatile and will be trading all over the place for the next few months. ARLP/NRP are both MLPs with betas less than 1, so they won't swing that much. I think we have already seen the most of the movement and from here on up we should see slow but steady gains. ARLP should be pushing 60 in just a few months if not less.
I think we're headed towards greener pastures from here... kinda wanna buy some more though. If we go back to $54... then I will. Gotta make sure to have some cash though in cash some other screamin buys come along, and they most certainly will.
Yup. I wrote an article about the macros of coal a few months ago, but not all that much has changed really... Here are some stats from the article that I find quite impressive:
From 2001 to 2010, global coal consumption increased by 47 percent, or put another way, global coal consumption increased by about the same amount as the growth in oil, natural gas, and nuclear.
The EIA estimates that the international demand for coal will continue to increase and account for 47 percent of the world's electricity production by 2035
Globally, coal consumption grew by 5.4 percent in 2011, and it's share of in global primary energy consumption increased to 30.3 percent (highest share since 1969) - generating 42 percent of the world's electricity, according to BP (BP). Also in 2011, it was the only fossil fuel to record above average growth and the fastest-growing form of energy outside renewables.
Yes, I will admit that domestically, coal has seen better days, however, what a lot of people don't realize is that it accounted for over 42% of our electricity production in 2011. Eliminating that or even significantly reducing coal's market share in the energy mix would require MAJOR production increases from everything else, and frankly, I don't see it happening, even if cost weren't an issue (and it is a BIG issue).
Anyways... thats my song and dance. Long live king coal.
Oh cool. Thanks. I'll sign up now. Thought that seemed a little bold. I missed my opportunity last week to write Dec 7 puts on ACI @ $1.06, not sure if you follow coal, but getting in ACI at a CB of $5.94 would be pretty stellar or on the flip side, walk away with 15% gain in 1 month... not bad either way.
Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
It is all about timing and knowing the movement. I bought calls on ACI/ANR/BTU from June to Sept and I added 12% to my portfolio... averaging a 79% return. I love buying calls in coal stocks.
ACI & BTU are best in class imo and these are pretty good entry prices, especially for BTU. Volume is just not there right now, so I do think we will have a little pull back after yesterdays gains, but if you like the high volatility coal stocks like ACI, ANR, and JRCC, maximize your gains by writing puts.
For example, ACI Dec 7 puts were at a high of $1.06 on friday. That means you either ended up locking in a CB @ $5.94 or you walk away with 15% gains in just ONE month. Unfortunately today, they are only half that @ $.55, but just wait, ACI will come back down some.
Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
Where did you hear rumors of a warm warm winter? From what I have heard, we should expect a La Nada pattern or a very weak El Nino pattern, at least in the west/rockies region. As mentioned, that should result in average to slightly below average temperatures.
Last year was one of the warmest on record where I live, and way above average for most of the country. This was largely due to an unusually strong positive arctic oscillation (AO), which basically just means that the jet stream was really strong so the cold air from the north could not escape and make its way down into the mid/southern regions. AO's can't be predicted like weather patterns can, but the likelihood of anything close to last year in terms of AO is slim to none.
Don't get me wrong - I am not bashing your comment, as I enjoy your articles and comments on coal. Though I don't agree with your outlook on coal, I think it is important to see both sides - checks and balances. I also gotta give you credit sticking by your beliefs and not getting washed away by all the coal bulls.
Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
You really think so? Seemed to me like the market was really banking on a Romney victory... even the day of the election, ACI rallied to a 6 month high of $8.66, JRCC and ANR also hit 6 month highs in the days leading up to the election. You don’t think it is at all coincidence that the day after the first presidential debate, (which was clearly “won” by Romeny, and he mentioned he liked coal that night) coal stocks went up 40% (ACI) to +100% (JRCC) in just a month? Sure the polls were out there and everything, but seems kinda… strange… that coal’s biggest gains happened in the weeks leading up to the election, and biggest decline comes weeks after it.
I do agree that the short interest on coal was important, and that this is one of the last opportunities for shorts to cover after that run up, but I think the election played a big role. Then the sell off has some legitimacy – Obama has never been a coal fan and is now touting new EPA regulations, which I can understand would steer away buyers. Average volume has been way down ever since the election as well.
Don’t get me wrong, I am a coal bull and see coal headed back up as soon as the dust settles.
A lot has changed since 2011. The cost-benefit didn't really work out, but with prices dropping so much in 2012, I think we will see a lot more of it, and the data already shows. Looking at the latest quarterly report from the EIA, exporting is up 23.5% on the year, but since the data for 2012 only covers up till June, just comparing April-June 2011 vs. April-June 2012, exports were up 38% y-o-y. Exports to China are up 151% y-o-y. (http://1.usa.gov/TVu1fD)
Part of the problem is we don't really have the proper exporting terminals in place, but that is changing as new terminals are being built right now. And I believe ANR has partnered up with KMP for that exporting?
At $2.50MMBtu, I completely agree… things do not look good for coal. That was a tough time, but it is behind us, and we won’t be seeing those prices again. Current prices are at $3.75, an increase of 50% since then.
I do find it interesting that ACI was your target. Next to BTU and ARLP, I’d say ACI is one of the better positioned coal companies out there, but I do see your point about the sulfur emitted. I just think that since ACI has a larger thermal coal exposure and thermal prices have “bounced” off the bottom according to ACI’s CEO, while met coal seems to be “along” the bottom, ACI should be ok compared to say – ANR. Again though, ACI doesn’t really ship to China/India, however, with all the EU financial woes, they have been cutting costs and coal demand in the EU is up.
There is a lot of talk and worry about the EPA/Obama implementing a heavy carbon tax on coal (like in Australia). While this is of course somewhat concerning for anyone who is bullish on coal, I think the time frame is important. I remember reading somewhere that while the Obama Administration is “serious” about its coal carbon tax, it is going to take a backseat to the fixing the economy, and since that is not likely any time soon, I think we can relax on the coal carbon tax issue. Besides, we have already seen federal courts turn down EPA regulations on coal.
As Paulo Santos wrote earlier this month - "For coal, the worst is behind"
Still scratching my head on this one - Not sure how many, but a bunch of LUV Jan 7.5 puts were bought today... I am long LUV and have been looking to get out... maybe get out by selling $9 calls... for the $.40 premium.
Yup. But, the low volume definitely saved it today. It broke $7.11 support level, and the next support isn't till ~$6.39 I believe. On normal volume, this thing woulda tanked.
The high volatility drives those premiums way up so great way to make money with coal. I don't think <$6 is out of the question. We've seen it as low as $5.50. I don't see it going much below $6, but by no means is it out of the question.
Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
Alliance Resource Partners: Buy This Coal MLP Below $60 [View article]
The War On Coal: Sell Arch Coal [View article]
From 2001 to 2010, global coal consumption increased by 47 percent, or put another way, global coal consumption increased by about the same amount as the growth in oil, natural gas, and nuclear.
The EIA estimates that the international demand for coal will continue to increase and account for 47 percent of the world's electricity production by 2035
Globally, coal consumption grew by 5.4 percent in 2011, and it's share of in global primary energy consumption increased to 30.3 percent (highest share since 1969) - generating 42 percent of the world's electricity, according to BP (BP). Also in 2011, it was the only fossil fuel to record above average growth and the fastest-growing form of energy outside renewables.
(http://seekingalpha.co...)
Yes, I will admit that domestically, coal has seen better days, however, what a lot of people don't realize is that it accounted for over 42% of our electricity production in 2011. Eliminating that or even significantly reducing coal's market share in the energy mix would require MAJOR production increases from everything else, and frankly, I don't see it happening, even if cost weren't an issue (and it is a BIG issue).
Anyways... thats my song and dance. Long live king coal.
VIX - Options Volatility Sonar: Monday Recap [View article]
I thought you said the info on LiveVol.com was free? It is asking me to sign up for a monthly membership that is $250... can't afford that!
VIX - Options Volatility Sonar: Monday Recap [View article]
Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
The War On Coal: Sell Arch Coal [View article]
For example, ACI Dec 7 puts were at a high of $1.06 on friday. That means you either ended up locking in a CB @ $5.94 or you walk away with 15% gains in just ONE month. Unfortunately today, they are only half that @ $.55, but just wait, ACI will come back down some.
Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
Last year was one of the warmest on record where I live, and way above average for most of the country. This was largely due to an unusually strong positive arctic oscillation (AO), which basically just means that the jet stream was really strong so the cold air from the north could not escape and make its way down into the mid/southern regions. AO's can't be predicted like weather patterns can, but the likelihood of anything close to last year in terms of AO is slim to none.
Don't get me wrong - I am not bashing your comment, as I enjoy your articles and comments on coal. Though I don't agree with your outlook on coal, I think it is important to see both sides - checks and balances. I also gotta give you credit sticking by your beliefs and not getting washed away by all the coal bulls.
Coal Stocks Hit Hard In November: Buying Opportunity? [View article]
I do agree that the short interest on coal was important, and that this is one of the last opportunities for shorts to cover after that run up, but I think the election played a big role. Then the sell off has some legitimacy – Obama has never been a coal fan and is now touting new EPA regulations, which I can understand would steer away buyers. Average volume has been way down ever since the election as well.
Don’t get me wrong, I am a coal bull and see coal headed back up as soon as the dust settles.
The War On Coal: Sell Arch Coal [View article]
Part of the problem is we don't really have the proper exporting terminals in place, but that is changing as new terminals are being built right now. And I believe ANR has partnered up with KMP for that exporting?
At $2.50MMBtu, I completely agree… things do not look good for coal. That was a tough time, but it is behind us, and we won’t be seeing those prices again. Current prices are at $3.75, an increase of 50% since then.
I do find it interesting that ACI was your target. Next to BTU and ARLP, I’d say ACI is one of the better positioned coal companies out there, but I do see your point about the sulfur emitted. I just think that since ACI has a larger thermal coal exposure and thermal prices have “bounced” off the bottom according to ACI’s CEO, while met coal seems to be “along” the bottom, ACI should be ok compared to say – ANR. Again though, ACI doesn’t really ship to China/India, however, with all the EU financial woes, they have been cutting costs and coal demand in the EU is up.
There is a lot of talk and worry about the EPA/Obama implementing a heavy carbon tax on coal (like in Australia). While this is of course somewhat concerning for anyone who is bullish on coal, I think the time frame is important. I remember reading somewhere that while the Obama Administration is “serious” about its coal carbon tax, it is going to take a backseat to the fixing the economy, and since that is not likely any time soon, I think we can relax on the coal carbon tax issue. Besides, we have already seen federal courts turn down EPA regulations on coal.
As Paulo Santos wrote earlier this month - "For coal, the worst is behind"
VIX - Options Volatility Sonar: Monday Recap [View article]
For Coal, The Worst Is Behind [View article]
For Coal, The Worst Is Behind [View article]
Is It Apple, The Fiscal Cliff, Risk Aversion, Or All Of The Above? [View article]
Alliance Resource Partners: Buy This Coal MLP Below $60 [View article]