Buy Coal and Uranium?

[tylerrr]

And so it happened ...

http://www.npr.org/sections/thetwo-way/ ... bankruptcy

that is huge news....thankfully I didn't buy BTU. Another reason I like industry ETFs so much!

[jacob]

BTU was once a top holding of KOL. If you bought KOL in 2011, you would implicitly have bought quite a bit of BTU above $1000/share as well.---Similarly to how people who bought index funds in 1999 bought a lot of pets.com, etc. Obviously, now that BTU has been hammered down to $2, it's not a big part of KOL anymore.

[tylerrr]

BTU was once a top holding of KOL. If you bought KOL in 2011, you would implicitly have bought quite a bit of BTU above $1000/share as well.---Similarly to how people who bought index funds in 1999 bought a lot of pets.com, etc. Obviously, now that BTU has been hammered down to $2, it's not a big part of KOL anymore.

Yes, but at least you're not ONLY buying BTU if you buy an ETF like KOL.

[Chad]

. Another example of how the true cost of certain things are not actually accounted for in a free market.

Chad, that's not a free market, that is a highly regulated market. And that is how highly regulated markets ALWAYS work.

Feel free to complain about environmental costs being factored out, but at least acknowledge the fail was a regulatory failure.

A free market solution would be to give environmental cleanup priority in bankruptcy, and let the markets decide bond/labor/capital prices. But those premiums were split by regulators and regulated, alike.

It was regulatory failure. They needed more of it for this industry.

All markets need some form of regulation, some markets more than others. I agree a market should be as free as possible, but the myth/religion of a pure/free market prevents us from discussing what actually matters. It places unreal expectation that can never be reached and treats any other option as heresy. Instead we always end up talking about market theory that can only be applied in a sterile environment with only intelligent actors. Of course, this does not exist.

A priority in bankruptcy would still be regulation and it's unlikely there would be enough money left over after a bankruptcy to pay for the cleanup, even if it where the priority. Plus, the public shouldn't have to carry the risk of a shortfall in money for the cleanup or have to sue the every company for it.

There is nothing currently stopping the market (bond/labor/capital) from pricing in cleanup costs. They don't because they haven't traditionally been forced too.

[Fish]

Coal is much more the "falling knife" than oil.

Next time there's a falling knife I'm going to catch it.

[tylerrr]

so it looks like most of you guys were wrong on coal.

Could have almost doubled your money on KOL from mid 2016 to now.

[Chad]

Yep, KOL slowly and steadily crept upward. Never 100% correct on predictions. Though, I'm still happy with the train of logic behind the prediction, as it still holds up. I would sell now if I owned any coal assets, as I don't see a light at the end of the tunnel for coal. The show by Trump a week or two ago with coal regulations is just lipstick on a pig and has provided a little boost to KOL. The industry will be in steady decline for a long time, as old coal electric plants are mostly being closed for some other form of electric generation (natural gas being the most popular). Coal is more of a tradable asset class now than a long-term investment.

https://morningconsult.com/2016/05/03/c ... ower-plan/

China is pulling back too:
http://energydesk.greenpeace.org/2016/1 ... er-plants/

Britain to close all coal plants:
https://www.theguardian.com/environment ... se-by-2025