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Arch Coal Inc. Message Board

  • cadmium_telluride cadmium_telluride Apr 23, 2013 7:16 PM Flag

    Which Part of the Coal Super Cycle Story Do You Guys Not Understand?

    Which Part of the Coal Super Cycle Story Do You Guys Not Understand?

    The US coal sector remains cyclic like it always does. We are now at the cycle low and poised to move much higher:

    1. In Q1-2013, ACI reported $70M of adjusted net loss on $825M coal sales revenue. That's a loss of 8.5% on revenue.

    2. In another word, coal price only needs to go up 8.5% for ACI to break even and then starts to make profits.

    3. You can NOT say the same thing for shale gas producer. A 8.5% price rise of natural gas price at $4.23/mmBtu only brings it to$4.59/mmBtu. Shale gas priduces need to see $9.00/mmBtu or more to be truly profitable.

    4. So why do you think the NG sector is the one to play, when NG is still far below profitability, while coal is right about to turn profitable?

    5. Don't you understand the NG supply will COLLAPSE, as shale gas players can NOT afford the expensive capital money spending to keep drilling wells.

    6. Don't you understand there are TOO MANY shale gas players in that sector. The natural result is some MUST be killed one way or another to bring competition down?

    7. Don't you understand that NG price has been going UP form one whole year. It's an absolute aberration that coal price has not moved up in sync yet. But utilities have MOVED back to coal nevertheless.

    8. Don't you understand US coalinventory is down, exports are up, and producers increases [production curtailment to rebalance supply/demand.

    Coal is poised to make huge upward movement soon. Count on it. I am holding my coal shares firm and bought more ACI today.

    Sentiment: Strong Buy

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    • Do you understand that now, folks?

      You need to hold on to your shares tight and be patient.

      Whatever will come, will come. Doesn't matter it comes later than you expected as long as you hold your shares firm. Do NOT sell.

      Once you sell, the market moves ahead without you. And it can move fast and furious, dropping you in dusts.

      Do NOT swing trade and lose your shares.

      Sentiment: Strong Buy

    • This is an opportunity you probably will never see again in your lifetime, don't you understand?

      The world can only go from before Peak Oil, to after peak oil, just once.

      It's like a person can only go from teenage to a middle aged person and then to a senior just once.

      Likewise, China's underground coal reserve can only go form prior to Peak Coal, to post Peak Coal, just once in the entire history of humanity.

      And that one historic event that can only happen once in the entire human history, is happening in our time.

      That's a tremendous coal opportunity you will not see a second time.

      Not to mention that the Shale Gas Revolution bubble can only burst once, soon.

      Sentiment: Strong Buy

    • Those who still don't get it, will never get it.

      This coal super cycle is a once in a lifetime opportunity. There will never be another time when China turned from a coal exporter into a coal importer and growing rapidly. There will not be another time when the US shale gas boom will soon turn into burst. There will not be another time when the world's oil supply goes from before Peak Oil to after Peak Oil. And yet there will not be another time when China goes from having more coal underground than those dug out, to having less coal underground than what's already dug.

      And some are still selling their coal shares dirt cheap here. I am the one who is trying to buy as much as I can, and on margin buying power as well. Remember, by using margin, a double in share price is translated into multiplying your portfolio by eight times. Another double and you multiply your portfolio by another eight.

      Sentiment: Strong Buy

    • The coal sector is always cyclic. Don't you guys get that part already?

      Sentiment: Strong Buy

    • I guess the part that people don't understand is that they need patience to hold share and don't trade in or out of their positions. If they do, one day like this, the shares suddenly move a lot higher without them. They will never get a chance to buy back their shares.

      I would hesitate to chase shares higher on a day like this. Stocks don't keep going higher on a straight line. But I surely will hold my existing shares firm. I will try to add more on pull backs.

      Sentiment: Strong Buy

    • Some will never get it.

      Great investment opportunity requires great patience. I have been patient enough. Some times I feel I am not patient enough. And on this board a lot of folks have definitely run out of patience.

      I stand by everything I said. I have nothing more to add except for re-iterate what I have said many times.

      I am holding and adding more shares on the way up, using increased margin buying power. I added a lot of ACI shares yesterday morning at around $4.00. I am not going to add today at $4.40 I am even tempted to sell some at $4.40. But I decide to just hold on. I will only add on each dip, using increased buying power obtained from each rally.

      As I shown, using the right margin strategy, you can turn a 10 fold gain in share price into 100 fold or more gain in portfolio value gain. I suffered heavy loss in the past two years because I hold on to coal. I have less than $100K left, but more than $50K. I am confident I can turn my current portfolio to $5M in 1.5 to 2 years. Laugh all you want. But this is how you make huge profit from extreme patience.

      Another buy order is set at $4.20 so I can add more when ACI drop back to that level.

      Sentiment: Strong Buy

      • 1 Reply to cadmium_telluride
      • Don't be silly. Anyone can predict a cycle or even a super-cycle. But if you can't get even remotely close to figuring out the WHEN, such predictions are worth precisely buckus. Look, even I can do it: "Coal will enter another supercycle!". See? There ya go, I just made the same prediction you did. Of course, it's worthless without some sense of the timing of things. You're selective memory is already erasing your past mistakes.

        Or to put it another way. Your current thesis requires ACI to increase by around 50-fold in two years (less with your magic margin-use calculations that won't work in real life). I can make the SAME bet with more leverage, defined risk, and far, far less money simply by buying around $6500 worth of ACI Jan 2015 calls @ strike $10 or higher. And, unlike you, I understand the mechanics of share dilution and debt a whole lot better. I very much doubt that common stock shareholders of ACI and/or JRCC will make out as well as you seem to think you will. I got my defined risk bets in place, they haven't changed. But I am more realistic about it than you are.


    • Those of you who simply can not hold some shares for more than a few days, would you getjust walk away for good? The volatility will kill you.

      Those willing to hold shares firm for big long term gains, hold on to your shares firm.

      Sentiment: Strong Buy

    • So china's electric usage numbers are not over exaggerated?
      China is not headed for a bust?

      • 2 Replies to jkwelli
      • China's electricity generation seems to be picking up in April, up +6.2% year-over-year.

        Sentiment: Strong Buy

      • No bust in China. In April, power generation/consumption raised +6.8% versus April last year. That's very healthy growth. The most energy intensive sector saw even higher growth. Cement production grew +8.7% year-over-year, and steel production was up +8.1%.

        The point I want to make is there is still plenty of room for demand growth in China.

        China consumed 4.7 trillion KWH of electricity in 2012, versus 4 trillion in the USA. Per capital consumption is still only 9 KWH per person per day, a fraction of the US per capital consumption. But you look at all the household items that costs electricity, they should consume the SAME amount of electricity whether in China or in the USA. An air conditioner burns the same electricity in China or in the USA. A desktop computer uses the same electricity in China or in the USA. An electric stove in the kitchen. Same story. A light costs the same electricity in China or in the USA.

        So when you think about all the things that costs electricity, it is amazing that the average Chinese still uses only 1/5 of electricity of an average American usage. This is not going to last. There is a lot to catch up which gives plenty of room for growth.

        And, since China build houses use stell and cement, rather than use wood board, an average Chinese household costs much more energy than an average American household in just meeting the basic housing needs. Maybe several times more.

        Sentiment: Strong Buy

    • Chinese move to BAN low quality Indonesia coal imports, is HUGE. A big chunk of global coal supply, the filthy Indonesia coal, is suddenly GONE. That's why the coal sector rallied hard in the past two days.

      Sentiment: Strong Buy

      • 1 Reply to cadmium_telluride
      • Everything that needs to be said about the coming coal super bull cycle, has been said. There is no more that needs to be said. Hold all your coal long positions. Ride the rocket out, and enjoy seeing the shorts being fried. The shorts are just too greed. When they had a chance to cover JRCC at $1.45 they didn't. Now they have a chance to cover JRCC at $3.35, they wouldn't. They will stay around and cover their shorts at $60+ per share, or at a price of their brokers choosing.

        Sentiment: Strong Buy

    • The coal sector, just like any other commodity sector, is inheritantly cyclic. Is that a so far fetched concept for you guys to comprehend?

      Right now we are at the cycle low. Which means a great investment opportunity, as moving from cycle low to cycle high means a huge profit to be made. Look at the long term chart. Look at how JRCC rallied from $3.56 to $62.86 in ten months in 2007-2008. Are you not convinced yet? You will be convinced AFTER-THE-FACT and after you have lost the buying opportunity.

      Sentiment: Strong Buy

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