Incredible Run in the Coal Space

You could throw a dart and make tons of money the past 4 months, but certain sectors have been more than incredible. One such group are the coal stocks - they are making moves similar to the commodities bubble in 08 [May 21, 2008: Coal - Just Amazing]. This was one of my favorite groups in late 2007 through mid 2008 as I believed a secular shift was occurring as coal went from a domestic commodity to something much more similar to oil - global in nature. The relative ease of transport is what has separated coal from natural gas - both of which the U.S. has in abundance but only the former is (relatively) easy to move around the globe to countries which are the new energy hogs. From 2007 [Sep 18, 2007: Another Look at Coal]

A key driver of this demand has been China's emergence as a net importer of coal in 2007. The country is firing up a new coal-burning plant each week, and this growing appetite has devoured coal from Australia, South Africa and other suppliers that would normally ship to European markets.

Some European consumers have therefore turned to U.S. suppliers to replace coal that is now too expensive to ship all the way from Asia.

Some sample returns below:

Massey Energy (MEE) +77% since early October (3 months)