We published a call recommendation on NSC yesterday at 11:22 a.m. EST on http://www.goldandenergyoptionstrader.com. It was followed by our rationale last night. Here is that writeup.
Sometimes the best ideas come from unusual places. I have found over time that my best ideas come from insights that are very obvious to me but not yet to others.
Over Christmas, I drove with my family to Texas to see my wife’s family. On the way from Wisconsin to Texas I noticed that ALL the major rivers were creeks. This includes the Arkansas, Missouri, Oklahoma and Rio Grande. The Mississippi is not a creek but it is a shadow of its former self.
Then on Wednesday night there was a story on the NBC Nightly News about how low the Mississippi is and then soon tug boats may not be able to travel a good portion of the river. Here is the link to the story:
Holy s— I realized that I had my catalyst to take the knowledge of the river levels and make money off it. How?
One of the key cargo items on barges in the Mississippi is coal. If the barges stop, then that means guess what? Coal will need to be moved around by truck or rail cars. The best solution is rail cars.
The average barge holds cargo that fills 15 rail cars or 60 trucks. The average tug boast can push 16 barges. That means 215 railcars or 1060 trucks to replace the barge traffic.
The coal stocks have been pounded on the belief that the coal industry is dead and Obama hates coal. Therefore, rail stocks that transport coal have been hit and now we have the catalyst to move them off their lows.
I am sure analysts are becoming aware of this issue but it takes them time to act and we can move much quicker. I fully expect Jim Cramer to pick up on this in the next week and then the flood gates open for these stocks.
Now this idea is not a pure energy play but coal is the catalyst and we are playing on how it is delivered. This is how one invests and more to the point here speculates.