By going long coal stocks, you can implicitly bet that 1) in the short run, the war between Russia and Ukraine and the associated sanctions and trade disruptions will continue (reduced energy exports from Russia is the main cause of the current high coal prices), 2) supply of (non-Russian) energy will not respond much to higher prices, and 3) in the longer run, humanity will have a harder time transitioning away from burning coal for energy, or using coal to make steel and cement, than the market thinks.
It has been a bit over 2 years now, and the war continues with no end in sight. How many of #1-3 happened?
#1 has obviously happened. Nordstream 1 was blown up within weeks of my OP, and AFAIK Russian hasn’t substantially expanded its other energy exports. Less sure about #2 and #3, as it’s hard to find post-2022 energy statistics. My sense is that the answers are probably “yes” but I don’t know how to back that up without doing a lot of research.
However coal stocks (BTU, AMR, CEIX, ARCH being the main pure play US coal stocks) haven’t done as well as I had expected (the basket is roughly flat from Aug 2022 to today) for two other reasons: A. There have been two mild winters that greatly reduced winter energy demands and caused thermal coal prices to crash. Most people seem to attribute this to global warming caused by maritime sulfur regulations. B. Chinese real-estate problems caused metallurgical coal prices to also crash in recent months.
My general lesson from this is that long term investing is harder than I thought. Short term trading can still be profitable but can’t match the opportunities available back in 2020-21 when COVID checks drove the markets totally wild. So I’m spending a lot less time investing/trading these days.
It has been a bit over 2 years now, and the war continues with no end in sight. How many of #1-3 happened?
#1 has obviously happened. Nordstream 1 was blown up within weeks of my OP, and AFAIK Russian hasn’t substantially expanded its other energy exports. Less sure about #2 and #3, as it’s hard to find post-2022 energy statistics. My sense is that the answers are probably “yes” but I don’t know how to back that up without doing a lot of research.
However coal stocks (BTU, AMR, CEIX, ARCH being the main pure play US coal stocks) haven’t done as well as I had expected (the basket is roughly flat from Aug 2022 to today) for two other reasons: A. There have been two mild winters that greatly reduced winter energy demands and caused thermal coal prices to crash. Most people seem to attribute this to global warming caused by maritime sulfur regulations. B. Chinese real-estate problems caused metallurgical coal prices to also crash in recent months.
My general lesson from this is that long term investing is harder than I thought. Short term trading can still be profitable but can’t match the opportunities available back in 2020-21 when COVID checks drove the markets totally wild. So I’m spending a lot less time investing/trading these days.
Here are some publicly traded large companies that do a lot of coal mining:
https://finance.yahoo.com/quote/BHP/
https://finance.yahoo.com/quote/RIO/
https://finance.yahoo.com/quote/AAL.L/
https://finance.yahoo.com/quote/COALINDIA.NS/
https://finance.yahoo.com/quote/GLCNF/
Coal India did pretty well, I guess. The others, not so much.