|
Mining for Coal 's +267% Returns
|
|
Published:
June 16, 2008
Oil prices have been grabbing the
majority of the headlines lately,
but it may be a different energy
sector that grabs the majority of
the gains in the foreseeable future.
The price of coal, or "Black Gold"
as they're are now calling it on
Wall Street, increased by +73% last year.
And the forces driving up prices
look like they will continue, making
this sector attractive for new
investors.
Demand For Coal is Growing Fast
As energy-hungry emerging-market
nations ramp up their demand, coal
has been the fastest-growing fuel
source on the planet. Over the past
five years, global consumption of
coal has grown by 1.4 billion tons,
or about +30%. That's double the
+16% growth in natural gas and more
than triple the +9% growth in oil.
Last year alone, the amount of
coal-fueled generating capacity
added in China was equivalent to the
power grid of the entire United
Kingdom. And worldwide, the dozens
of plants currently under
construction are forecast to boost
global demand by more than 500
million tons per year in the near
future.
Coal Supplies are Constrained
In the meantime, flooding in
Australia and power outages in South
Africa have put a major dent in the
available supply. Production in
China has been hampered by
everything from blinding snowstorms
to crippling earthquakes. Worse
still, government officials have
also been forced to close over two
hundred mines for safety reasons.
The situation has become so
precarious that over 30 Chinese
power plants have had to shut down
lately for lack of fuel -- and many
regions of the country have
dwindling inventories equal to a
supply of seven days or less.
Analysts Project Coal's Continued
Run
Against this backdrop, coal prices
have actually been rising faster
than crude oil lately. Last year,
thermal coal futures on the New York
Mercantile Exchange spiked +75%, the
sharpest increase of any energy
commodity. Since then, prices have
climbed another +40% to reach $80
per ton -- and some forecasts have
prices topping $100 in the near
future. As for metallurgical coal
which is used in the production of
steel, at least one analyst is
projecting prices to vault to as
much as $250 per ton by 2010.
The coal industry remains in a
cyclical upswing, and coal stocks
continue to gain favor on Wall
Street. The Stowe Global Coal Index
has had a total return of +267%
since 2005 -- that beats the
S&P 500's +23% returns for the same
period by more than a 10-to-1
margin.
A Diversified Play on Coal
In a recent issue of his premium
newsletter,
The ETF Authority,
editor Nathan Slaughter shares a
compelling new idea for investors
looking to tap into this burgeoning
sector. This brand new,
cost-efficient, fund is up +34%
since its debut just four months
ago. How can you argue with an
annualized gain of +148%?
To learn more about
The ETF Authority,
including how to access the profiles
of this fund, please
visit this link. |
|
Stephen Leeb's Market Forecast
Receive a free ongoing, PhD level Wall Street education in how the markets
work so that you can see into the future and position yourself accordingly.
The Daily Reckoning
The Daily Reckoning offers a "uniquely refreshing" perspective on the
global economy, investments, and the ability to live well in uncertain
times.
|
GFT forex
FREE Introductory Forex Trading Guide -- Contains everything a beginner
currency trader needs to know, before entering the fast-paced forex market.
Success Trading
Our Success Trading Group scored 52 Wins in 52 Weeks - 365 Days Without A
Loss!
|
|
|
|
|
| FREE
weekly newsletter contains actionable investment ideas from
today's leading market analysts. |
|
|
Special Offers
|
 |
|
The Special Asset Class Legally Obligated to
Pay Yields of 8%, 9%, 10%... And Even Higher
Learn
More |
|
 |
|
3 Penny Stocks
Poised to Soar 300%
Learn
More |
|
|
|
|
