TFN eNews 10/20/2009: The best stock to buy now!
Published via e-mail broadcast on October 20, 2009
In today’s TFN eNews:
* The only thing between us and Planet of the Apes
* Where the growth is in coal
* When growth isn’t growth
Dear TFN eNews reader,
Two months to go before the grand convention of professional climate hysterics in Copenhagen. According to whom you’re listening to, it’s 50 days, three months, or ten years to the end of the world. The only thing between us and Planet of the Apes apparently is the establishment of a global Ponzi scheme of carbon credits.
Notwithstanding the talk, the coal industry keeps expanding. Of course, the growth is not here in the United States — where coal has been more or less blacklisted at least as far as federal policy is concerned. Once again, China is going to be the main player.
“So are Peabody Energy (NYSE:BTU) and James River Coal (NASDAQ:JRCC),” TFN megatrend master Andrew Snyder chimes in. There’s good news from the coal industry. But once again, it has nothing to do with domestic demand. China is in charge and all indications show it will be for quite some time.
“The news comes from BTU. The $12 billion coal miner released its latest quarterly earnings before the day’s opening bell. While the Street likes the top and bottom line, savvy investors will be interested in knowing where the growth is coming from and where it will come from in the future.
“It is all thanks to China: Reports show the economically expanding country imported some 21 million tons of metallurgical coal through August. That’s more than ten times the amount imported last year.
“During the same time, China imported 38 million tons of thermal coal. Last year, it exported a mere 7 million tons of the stuff.
“Thanks to tight pricing conditions mandated by Beijing, the seaborne market appears able to keep its top spot through future years, even though domestic production can fill the bill. The country’s leaders want to use everybody else’s coal before digging itself into a literal hole of its own. That’s good news for Peabody and its competitors…”
It gets even better. Read on here: http://www.todaysfinancialnews.com/gold-and-resources/peabody-energy-playing-chinas-red-hot-coal-industry-10203.html
*** *** It’s this growth in Chinese coal consumption that has me extremely bullish on what I call the #1 Best Stock to Buy Now.
Because China not only is the world’s top coal user. It has also surpassed the United States as the world’s top polluter.
You see, 24,000 of China’s nearly 28,000 coal mines use outdated technology and produce low-quality coal. (Hence the increased imports!) And China is building one new coal-powered electricity plant a week.
This December, world leaders will meet in Copenhagen to negotiate the next international environmental standards treaty.
China’s feet may well be put to the fire: By now, it puts out more CO2 output and greenhouse gases than any other country. This company provides a placative Clean Solution. For medium-term speculators, I think the stock holds a 70-145% upside by December 30, 2009.
Because no matter what boondoggle the politicos will come up with, the media will go bananas about coal and clean energy and carbon reduction! Which is exactly what we’re counting on to push this stock from its current depressed level of under 70 cents, close to its 52-week high of $1.63.
I think a gain of 145% over today’s levels is realistic. For more information, read on right here: http://www.todaysfinancialnews.com/HSC/ridic/WHSCK904.html
*** O il prices are back around $80 a barrel, for the first time in a year. Some pundits see this as a surefire sign of an economic recovery:
Interesting — those same guys considered it a sign of impending doom when oil hit $80 on its last upward spurt.
While the economic recovery in the United States consists mostly of smoke, mirrors, and pep talks that include the phrase “let me be clear”, how are things looking in other major economies?
Much has been made of a “recovery” in a number of European economies. But other than an increase in the euro’s valuation against the dollar, I have yet to be convinced.
But the drop in the euro weighs heavily on European exports — the primary engine behind Europe’s nominal “recovery”. Sure, the dollar was even cheaper at the peak of the Bush Boom. But the difference was that Americans enjoyed the benefits of capitalism in the form of full-time employment and disposable incomes.
Both are to global economic growth what oil and gasoline are to the locomotion of your car.
Accordingly, the eurozone economy remains shaky at best. The International Monetary Fund projects a mere 0.3% growth for the entire region in 2010.
If your memory reaches further back than that of a Beltway insider, you’ll remember that this is the kind of “growth” that Germany enjoyed during the bad stagnation years in the 1990’s.
*** Special offer: Northeastern University’s Master of Science in Finance: fully online, 16 months, AACSB accredited. Visit http://onlinemsf.neu.edu/finance-online
*** Quote of the Day:
“You’d think it’s October 2008, the final month in the Obama presidential candidacy, rather than October 2009, nine months into the Obama presidency. Yet the Obama White House is in full campaign mode — maybe because it needs to mask the shortcomings of the Obama presidency.”
– Steve Huntley, Chicago Sun-Times
Recommended Reading:
Peabody Energy: Playing China’s red-hot coal Industry
What to do about SpongeTech (SPNG)?
Q4 Update: TFN Complete Guide to Stem Cell Stocks under $10
Today’s Top 3 Financial News Stories:
IBTimes.com – Commodities Extend Rally as USD Keeps Sinking “Driven by advance in stock markets and decline in USD, crude oil surged +1.4% to settle at 79.61 Monday. Today in Asia, the benchmark contract extends recent rally and rises to as high as 80.05. Winning streaks in oil products persist. ROBA gasoline climbs for the 7th day and trades 1.993 while heating oil soars for the 9th day and trades at 2.057, the highest level in 11 months.”
Bloomberg.com — U.S. Stocks Retreat as Housing Starts Data Overshadows Earnings “U.S. stocks fell and the dollar rebounded from a 14-month low against the euro as a disappointing report on housing starts overshadowed better-than- estimated earnings at companies from Apple Inc. to Pfizer Inc.”
YahooNews — Higher jobless rates could be new normal ” Even with an economic revival, many U.S. jobs lost during the recession may be gone forever and a weak employment market could linger for years.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
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