The problem with passive financial investing (where you direct money, but are not involved in any operational decisions) is that it’s inherently a bet FOR civilizational adequacy—it only takes a partial collapse (or corruption or not-collapse-but-stupid-equilibrium-change) to keep you from getting paid.
That’s a good point. Apparently I’m still a believer in civilizational adequacy, at least to this extent! But a lot of this is just lack of alternatives, right? Even if I was to become an owner-operator, my money could still be regulated/taxed/nationalized away, and it’s riskier in other ways (e.g., less diversified).
I know nothing about the coal business, but I can imagine they’re already so leveraged that a slight drop in prices will kill them. I can imagine regulatory risks that shut them down (or nationalize their profits by environmental or tax mechanisms). I can imagine that many of the public companies are operators rather than owners of the underlying mineral rights, and most of the long-term value is locked up in private companies and trusts.
Only the middle one is a real issue.
It’s also possible that this is a market failure, and ESG and other irrational capital allocation has made this a great opportunity. I don’t know how I’d get to the truth of it (or more formally, how I’d update from my EMH-on-average-but-highly-variant-per-company prior for this industry), without a LOT of effort and some amount of insider knowledge.
Yeah, I don’t know how to do it without a lot of effort either. (The “insider knowledge” I have came from following a former professional coal industry analyst who often shares his views on Twitter and in Twitter Spaces. Seems to be enough so far, but hopefully I’m not just fooling myself / gotten lucky.)
That’s a good point. Apparently I’m still a believer in civilizational adequacy, at least to this extent! But a lot of this is just lack of alternatives, right? Even if I was to become an owner-operator, my money could still be regulated/taxed/nationalized away, and it’s riskier in other ways (e.g., less diversified).
Only the middle one is a real issue.
Yeah, I don’t know how to do it without a lot of effort either. (The “insider knowledge” I have came from following a former professional coal industry analyst who often shares his views on Twitter and in Twitter Spaces. Seems to be enough so far, but hopefully I’m not just fooling myself / gotten lucky.)