Discussion in 'Stocks' started by blowingup2012, Apr 13, 2012.
Looks like its that time fellahs. Time to get into defensive stocks. Grab your feet!
funny you mention this today, I only check up on my equity accounts a couple times a month and just got into some coal and minerals. I don't really pay attention to what is happening in the world but have coal stocks been crushed just because Obama hates coal and he is going to win the election? It may seem foolish to invest with out really knowing the fundamentals but following fundamentals has never once made me money.
Check out a chart of one of Coal's alternatives, Natural Gas, theres your answer.
Honest the spead between Cude oil and Net Gas is absurd... Time to switch energy we have plenty of it can purchase as much as needed from Mexico and Canada.
This will clear up deficit related to foreign energy spending..
I think there needs to be a hurricane or two to get nat gas prices to move up markedly and we might be under 3$ for awhile as fracking has increased supply to the extreme.
At 1.95/btu I don't think there is much lower to go as I believe many producers will reduce production which should ease the pain that coal is feeling, but it might take awhile for a rebound.
Cheniere (LNG) won't be exporting until 2017 or something ~
The EPA is killing electro's that use coal, and I don't see anything letting up there if Obama wins again which I think is going to happen.
If Romney wins coal will be the trade of 2013 - maybe a Republican sweep of both houses would also do alot for coal (in getting the EPA off the electro's), but I don't see either of those happening.
It's pretty hard to see right now how nat gas vehicles will increase demand enough to offset increasing supply but maybe in a few years ?
Solar has also gotten whacked due to the low nat gas prices ~
All that being said I'm short puts on some solar and a bunch of coal names. Coal companies have been around for along time - I don't see any major bankruptcies as the market seems to be indicating.
Watch nat gas that will tell you what's going on with coal ~
This is a multi segmented story. Part of the trade is natural gas is ridiculously cheap, second part is, steel demand from china has weakened considerably.
#2 outweighs #1 due to elasticity of demand. Can't magically replace coal power plants with natural gas power plants over night (occurs slowly over time).
However, you can immediately cut off steel production (and therefore the need for coal)