Why Coal?

I already have gold and oil positions. I am buying coal for three reasons.

In ‘real people’ terms, here are the reasons:

1. It’s a McCain play. Dems loathe coal. For some reason, they think our fucking power plants can operate without it. Should McCain win, coal will be on the dinner plate of every American.

2. Another way to hedge against dollar weakness. The coal story is based upon Asian growth. Like all commodities, coal is priced in dollars. Should those dollars decline in value, the value of coal should increase. Also, despite slowing growth, both India and China have hard ons for ‘the other black gold.’

3. Seasonality. Think winter. Aside from April, coal stocks perform best in October. Last year, most coal stocks booked 10-15% returns in October alone. Going through the numbers of some of our biggest coal companies, they averaged a return of 8% in October, over the last 5 years.

Naturally, the charts suck and the trends are un-Godly. I am early to the sector and will probably have to continue to average down. However, 10 bucks (I never pay out on internet bets, sorry) says I bank coin on these fuckers before October is over and done with.

I bought 3,000 Freeport-McMoRan Copper & Gold Inc. Freeport-McMoRan Copper & Gold Inc. [[FCX]] @ $66.48, 2,000 Walter Industries, Inc. [[WLT]] @ $56.50 and 1,000 [[ROM]] @ $47.40.

UPDATE: I bought another 2,000 ROM @ $47.75.

Disclaimer: If you buy any of the above stocks because of this post, your wife will leave you for Dick Fuld. And, you may lose money.

You can’t say I didn’t warn you little Armageddon lovers. While you were over there, in your bullshit pleather chair, concocting ways to destroy America and bring capitalism to its knees, “The Fly” was doing his patriotic duty and buying equities. And, now, “The Fly” is spitting on your head, from the luxury of his 100th floor balcony.

Despite still being in a “coal hole,” my gains are bountiful and of course numerous. From Synovus Financial Corp. [[SNV]] to Citigroup Inc. [[C]] to [[UYG]] to [[ROM]] , I am winning and being an asshole about such illustrious victories.

People must think you are some sort of monstrous beast, always wanting the market to collapse and shit. What the fuck is wrong with you?

Anyway, on this spike, I will continue to buy Freeport-McMoRan Copper & Gold Inc. [[FCX]] and Walter Industries, Inc. [[WLT]] . I will not buy Peabody Energy Corporation [[BTU]] , since something entirely queer is happening to its share price.

In short, my purchase of commodities is not geared for momentum. As a matter of fact, I may end up being wrong about my entire thesis, which is the reflation of America, at the expense of the dollar. My commodity “gambles” are indirect bets on sustained dollar weakness, due to the 700 billion dollar bailout. If I am wrong, my bank and tech longs will more than make up for the commodity short comings.

My dinner (heavily salted meat with a red wine reduction) was far better than yours; because I do not eat crap— aside from the time when Domino’s pizza gave me a severe case of acute appendicitis.

Developing…

[youtube:http://www.youtube.com/watch?v=gGqq4ZX3cdE 450 300]

Don’t expect any big moves, until the banks get your hard earned tax dollars. After all, it’s in their best interest to keep the market gloomy, while the idiots in Congress put on a show. Oh, the poor congressmen are so concerned over the little ol’ tax payer.

Right.

There are some concerning matters in the banks, specifically Washington Mutual, Inc. [[WM]] and Morgan Stanley [[MS]] . On the other hand, real banks with chest hairs, Wells Fargo & Company [[WFC]] and JPMorgan Chase & Co. [[JPM]] did just fine.

My positions punched me in the face again, with losses in Citigroup Inc. [[C]] , [[UYG]] , Walter Industries, Inc. [[WLT]] and good old fuckery itself Freeport-McMoRan Copper & Gold Inc. [[FCX]] .

Look you, the entire world is out to kill short sellers. There is an unprecedented effort to create another bubble. The way I see it, instead of betting against the man with the magical printing press, I might as well befriend him and politely ask for a few billion dollars.

Finally, Research In Motion Limited (USA) [[RIMM]] is going to post numbers tomorrow. I am deathly afraid of buying it directly, despite its depressed share price. However, getting long [[ROM]] , down at these levels, may in fact turn out to be a rather profitable endeavor, indeed.

In my opinion, LIBOR is up, due to banks extorting Congress for the cheese. This is something they are able to control. So, it makes sense to give an appearance of doom, in order to get that cheddar, if you know what I mean.

I remember back in late 2002, Buffett made a big investment in Level 3 Communications, Inc. [[LVLT]] convertible bonds. The deal, similar to today’s Goldman Sachs Group, Inc. [[GS]] deal, nearly marked the bottom in the 2002 market maelstrom.

It’s not the money that’s important to Goldman, but symbolism.

The reason why I am bullish, at least in the near term, is because sentiment is about to change. If this 700 billion dollar fuck you goes through, the market discussion will switch from “who’s next to die?” to “how much liquidity did Citigroup Inc. [[C]] just free up, courtesy of the tax payer?”

Frankly, I see no reason to keep downside hedges on, with the market at these lowly levels. With my money, I will continue to allocate capital towards banks and basic materials/resources.

Indirectly, the basic resource trade will hedge my bank longs, or not. It’s entirely possible that both banks and commodities can boot stomp some fucktarded bearshitting old guys into and down idle manholes.

Keep that in mind when betting against me.

Top picks: Synovus Financial Corp. [[SNV]] , Citigroup Inc. [[C]] , [[ROM]] , Freeport-McMoRan Copper & Gold Inc. [[FCX]] , Walter Industries, Inc. [[WLT]] and [[UYG]]

I bought 2,000 Walter Industries, Inc. [[WLT]] @ $58.21.

Disclaimer: If you buy WLT because of this post, you will get the black lung. And, you may lose money.

Quit bellyaching about the fucking market and do something about it. We have morons with the black lung mining coal for us office types, yet we show them zero appreciation. Be a true American; buy coal stocks!

As you know, I own Peabody Energy Corporation [[BTU]] and Walter Industries, Inc. [[WLT]] . However, there are others worth looking at, such as Massey Energy Company [[MEE]] , Arch Coal, Inc. [[ACI]] , Patriot Coal Corporation [[PCX]] , CONSOL Energy Inc. [[CNX]] , Yanzhou Coal Mining Co. (ADR) [[YZC]] , Alpha Natural Resources, Inc. [[ANR]] and Foundation Coal Holdings, Inc. [[FCL]], mainly for shits and giggles.

Now, before digging yourself into a “coal hole,” you need to understand the difference between thermal and coking coal. One is used for heating your bullshit house, while the other is used for steel production. Getting long both BTU and WLT gives you a little of both.

Aside from that, I am hungry and will now make my way to the local deli for a fucking sandwich.

Developing…

Congress doesn’t have the balls to let the banking system fall by the wayside. I choose to believe, well connected/evil men, like Warren Buffett, know something most of you idiots do not—which is: the bailout is going to pass. Congress is just putting on a show for us television box watchers. Do not think, for one second, any of those asshats will risk tanking the stock market and the economy, while most economists say such a plan is needed.

With that being said, I like my chances buying dips, despite insane LIBOR rates. At the present, there is uncertainty. With a certain amount of ambiguity in the air, one could make nice sum of gold coins, via getting on the right side of the trade.

It’s pretty simple. Either we get a monstrous government investment in the housing market or we get Armageddon. For once, I want to bet with the g-men.

With my money, I like Citigroup Inc. [[C]] , [[UYG]] , Walter Industries, Inc. [[WLT]] and Freeport-McMoRan Copper & Gold Inc. [[FCX]] right here, right now. Also, I want to be long beaten down tech. The ‘Sick Steve Trade’ is over, as Apple Inc. [[AAPL]] saddles itself in the 120’s. Short cut the bitch and own the whole space, via [[ROM]] .

Finally, oil looks good; but is constantly tricking people. I already own oil, so I will not add more here. However, I will buy coal. I can always make room for some filthy, yet delicious coal, via Peabody Energy Corporation [[BTU]] and WLT.