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BorisNatasha
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Retired Foreign Service employee who served in or visited 58 countries during his career. In 1999 made a million and lost most of that only to come back strong and end up with a 2.6 million dollar portfolio which also took a major hit over the next few years. Now realizes the importance of... More
  • Steady returns in Coal 0 comments
    Mar 3, 2011 5:56 AM

    Coal is the safest energy play to own as it has consistently performed well over all time periods. The three coal companies that provide the best returns on investment over all time horizons are ICO, AHGP and ARLP. Unlike oil, the United States had an abundance of coal with a strong coal lobby in states such as West Virginia and Pennsylvania and Kentucky. President Obama's initiative on clean energy will not stop the production of coal since we need alternative means of energy in addition to oil. There is no clean coal, although pollutants can be reduced through various methods.

    Looking at a five year chart of all three companies and you will see that if you had invested equal amounts in each, even with the severe market crash of 2008, you still would have gained approximately 80 percent on your investment, or 16 pct per year for the five years.

    Five year chart



    Chart forInternational Coal Group, Inc. (NYSE:<a href='http://seekingalpha.com/symbol/ico' title='International Coal Group, Inc.'>ICO</a>)



    A two-year chart of all three companies shows an average return of 333 pct since there was no major market correction during this period.

    two-year chart

    Chart forInternational Coal Group, Inc. (<a href='http://seekingalpha.com/symbol/ico' title='International Coal Group, Inc.'>ICO</a>)


    A one-year chart shows an average return of 103 percent for the period.

    one-year chart

    Chart forInternational Coal Group, Inc. (<a href='http://seekingalpha.com/symbol/ico' title='International Coal Group, Inc.'>ICO</a>)


    A three-month chart shows an average return of 27 percent for the past three months.

    Chart forInternational Coal Group, Inc. (<a href='http://seekingalpha.com/symbol/ico' title='International Coal Group, Inc.'>ICO</a>)



    However, there are drops along the way such as this past week when the entire stock market took a hit. That said, your investment in all three would have broke even for the week with no loss as all three stocks recovered nicely.

    While I daytrade for a living, I do retain a harem of commodities and the coal sector is by far the most predictable and dependable for a steady return on investment

    (Yahoo charts are approximate)



    Disclosure: I am long ICO.
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