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Is George Soros Betting On The Long-Term Future Of Coal?
Submitted by Michael McDonald via OilPrice.com,
Perhaps the greatest nightmare for investors in a commodity stock is that the commodity in question goes the way of coal. After more than a century of dominance in the U.S. and abroad, coal appears to have entered into a structural decline. The EIA and others see coal export volumes declining, domestic U.S. demand remaining questionable, and intense competition from natural gas continuing.
A funny thing happened on the way to the graveyard for coal companies though – one of the industries greatest detractors, George Soros, appears to be stepping in as a supporter.
Soros, whose $24 billion fortune is built on successful trading, appears to have purchased several million dollars’ worth of stock in coal producers Peabody and Arch Coal according to filings reviewed by Britain’s The Guardian newspaper. Thermal coal has been hit hard by shifting utility company preferences for other power sources, while metallurgical has been hammered by the downturn in China which has hit demand for steel and other building materials. 2014 was a terrible year for coal producers, and 2015 has not shaped up much better.
All of this leads one to wonder what a savvy trader like Soros sees in coal. There are a few possibilities. First it’s possible that Soros is simply looking for a short-term bounce in beaten down coal stocks that have been left for dead. After all, the stocks of virtually all coal miners now trade for a fraction of what they did only a few years ago, and investors may be overly pessimistic about the short-term outlook in the sector.
Soros could simply be looking to trade on optimism the stocks related to his own investment, or even simply trying to pick the last coal stocks that will be left standing. In particular, news of Soros’ investment immediately led to a surge in the stock price of many coal firms which created an instant paper profit for Soros. It’s possible that the billionaire was simply looking to capitalize on a bounce he expected from the news, and then sell his shares as the news hit. If so, he did well. Given recent prices for the stocks, Soros could have made up to a 100 percent on his investment – perhaps as much as $2 or $3 million dollars.
But for a billionaire like Soros, $2-3M is hardly worth getting excited about. After all, a minimal 5 percent return on his net worth would yield $1.2 billion in a year or about $4.8 million each trading day – why go to any extra work or take on a lot of risk for a paltry couple million in short term gains?
Another more optimistic possibility is that Soros sees value in the companies given their provable reserves, which are on the order of 11 billion tons. In theory, these resources are worth hundreds of billions of dollars. It’s possible that Soros is looking to buy distressed assets for pennies on the dollar and then profit handsomely if coal prices rise in the future due to a combination of bankruptcies in the industry and reduced regulatory pressures. That theory is a possibility – after all 11 billion tons is a lot of coal, and coal prices are at decade-plus lows with futures prices near $50 a tonne. Perhaps Soros thinks coal has a long future ahead and that the magnitude of its issues are overstated. It’s possible prices cannot go much lower.
Therein lies the issue though. With prices at current levels, the assets themselves may not be economical to exploit. In practice, unless the resources can be profitably extracted from the ground, they are worth nothing.
Of course some commentators think Soros is simply covering pre-existing short positions. Given his well-known political leanings, it would not be surprising at all if Soros had shorted coal. If he did, and the purchases in recent months are merely short-covering, then investors may be getting excited about a false signal of optimism from Soros. There is no way to know if this is the case of course, but given the level of volatility in the industry and the risks to the future of the sector as a whole, investors would be wise to make sure any bets in business are well diversified.
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George Soros never bets. He has the regulators in his pocket. As well as the politicians
Soros should be digging for coal in a striped suit chained to a heavy ball.
for at least a dozen eternities
Soros was taught by Friedrich Hayek at the London School of Economics.
Austrian School for Soros.
Keynes and bafflegab for the masses.
Obama banned coal......so we could purchase the new and improved Soros CoalTM.
As crooked as Soros may be, he is not stupid.
10:1 he is hedging on the idea that when TRUMP crushes the field in the next election, he will undo many of the idiotic policies implemented by Barry OBummer.
Of course. The NWO's Oligarchy.
It always works like this. The government drives the private sector business out of business claiming bad karma, and then takes over the business for itself and it's financial enablers.
The oligarchs in Russia under Putin did the same shit, here, we had health care, crap mortgage origination, whatever. The list goes on and on.
Bammy says coal is bad (what else with golabl warming bullshit, like solar, etc., hah ha ha ha ha... it's already right there in front of your very noses) drives coal companies out of business, Soros et al buy the assets at pennies on the dollar.
This guy George Soros seems like a very well connected and knowledgeable man, unlike that guy Icahn.
Soros is covering short but I'm sure he knows the future of energy too and will wait a little longer to jump in.
George Soros shouldn't even be buying green bananas.
Hayek did teach at LSE but the school was founded by the Fabian Socialists, and there is no doubt their curiculum follows the globalist agenda. Obama's budget director, Peter Orszag, was schooled there, and so was Naomi Klein (The Rise of Disaster Capitalism.) The grads pop up in influential places on a regular basis.
Gotta say that although I upvoted you, I only did so after putting on a glove. I just have an issue getting that close to another man's dick.
Naomi Klein is a globalist?
Hayek was a man who believed in "forward guiding" the market. He dreamt of cybernetic control of market by the "intelligent".
So he would have loved the current HFT algo controlled and very elitist "intelligent" market. Can't be more Hayekian than GS and Greenspan, when it comes to "guidance".
As for coal plays : If you see what a disaster that has done to the Appalachians these days; where even the Russian Oligarchs are invited to rape the hills flattening them like pancakes, cutting down all the timber and polluting the shit out of the water table; you would understand that coal is worse than fracking oil to kill the soil you live on; let alone the air your breathe like Peking today.
Soros learned economics from the Nazis.
Simple formula - kill or displace the people and take their stuff.
Headed for a warm place, he knows the furnaces will need to be stoked for a very long time.
Say what you will about Soros. He's anything but stupid. Even in his choices of .gov regulators. Coal is the energy source of a collapsing world economy. Cheap oil is over and done. Fracking and Tar sands are heavy investments from extraction to chemical refinement to transportation. Renewables are entirely dependent on techno-magic and techno-magic is totally dependent on debt creation and future forwarding. And that regime is ending.
So over the next 50 years as we all slide slowly but surely into a 1950's or worse style economy (think lower energy, more local, less global) coal is the "back to the future" energy source. Until we mine it completely out worldwide.
Didn't soros help send lots of his people to the death camps? They must have used lots of coal in the crematorium, so he's just going back to his roots.
Buffet also bough an oil company recently. Another bottom call.
So Soros expects to be around for another 50 years?
Fuck George Soros
"If he did, and the purchases in recent months are merely short-covering, then investors may be getting excited about a false signal of optimism from Soros"
Anybody who looks to this criminal for optimism needs to be hung along side this decrepit fucker.
Isn't this what rentier financiers have been doing for hundreds of years? Collapsing industries and buying them up cheaply for pennies on the dollar. If you wanted to start similar projects the infastructure investment required is massive. No need to when someone else can do it for you. Same goes with mining/oil/energy etc.
Stupid quesion. Shouldn't you be buying the secured bonds of those companies? If they go bust, that equity position will go to zero. In bankrupcy, at least you'll get equity on the other side of the bankrupcy.
"Isn't this what rentier Usurer financiers have been doing for hundreds of years?"
Thousands of years...
LOL, George Soros was/is one of the "Global Warming" promoters!
Anyone who still believes that crap is dumb!
soros will make you believe anything that in the end will benefit him
and no one here really knows what the sob's agenda really is....
speculate all you desire
Wish there were a place wherre we could bet on the likelihood of George Soros passing with odds and everything.
I'll bet on him "contributing to global warming", if you'll give me better than 3:1
when the oil runs dry, he who owns the coal mines and the railroads shall inherit the earth. methinks soros and worn buffet intend to rule over us.
They have one foot on the bannana peal.
If by "intend to" you mean "already do" then yes, I agree.
George knows that mining coal was unprofitable,when you have to pay the miners $24 an hour,plus health care benifits..But after he turns his mines into forced labor FEMA re-education camps,George expects the coal industry to make a sharp rebound,and become profitable,once again..
Will they be forced to buy throwback uniforms at the company store using scrip?
" I load fifteen tons and whadda I get, another day older and deeper in debt."
It is just for his retirement account..........................................................................................
/s
Coal isn't going away anytime soon. 44% of our electricity still comes from coal powered plants.
Yep, but it was 75% a decade ago.
One day he will stand before Jesus and have to answer for his crimes. That day can not come soon enough.
Did you hear? Napoleon defeated England! I'm selling my english stock!
A man who sold his life and soul to Satan buys coal.
So what is the big surprise here?
He is preparing for his afterlife.
Satan needs more coal to stoke the fires of Hell.
The good news is that from an actuarial perspective, he won't be troubling us much longer.
You vastly underestimate the longevity of vampires.
I think he sees a republican president in our future. I wonder which one he bought?
Ruin a business or a country so you can buy it for pennies on the dollar. Works in Greece or on coal.
Soros putting a couple million in coal, is like me buying a piece of bubble gum. It's fuckng meaningless.
$2.5M/$24B => you do the math
Isn't this the same coal Obama is deep sixing? This doesn't sound like free market activity.
Obama, Buffett and Soros - you don't think?
No way man, this is 'Murika!
George?...
Just Die using one of these:
A) Auto-erotic asyphyxiation (which you are already familar with from your parties with Dominque Strauss-Kahn and the gaggle of 15-18 year old girls you've enjoyed too many times to count)
B) Nail gun (bankers choice)
C) Tall building preferably prodigious as in the Sears or Freedom Tower
D) Choke on an E-trade baby part.
Great article, but the utilities most certainly do NOT "prefer" to switch fuel sources...they like coal just fine.
It's the EPA with the preference
Great article, but the utilities most certainly do NOT "prefer" to switch fuel sources...they like coal just fine.
It's the EPA with the preference
coal keep hell nice and hot for him.
When the Grid experiences regional collapse, and widespread cascades due to coal units' forced retirements, emergency actions will be necessary. Executive action will ensue, and coal units will have to be reinstated post-haste to maintain economic and social order. Imagine a scenario like 9/11, but without any available coal generation, as power and gas lines are severed locally. A crisis is no time to find dry hydrants, and no energy re-dispatch alternatives, but, it does solve the over-population problems.
In Germany, they've shut down 7 of their 17 nuclear power stations. Their solution? Build more coal plants.
German use of coal for electricty generation has gone from 43% to 48% in the past 5 years. And their electricty costs are 2 to 3 times higher than the highest costs in north america.
Soros is most likely positioning himself to receive a windfall from the Feds to convert to "clean coal" (yeah, like clean whores, or clean sewers...) and/or receive carbon tax credits for non-operational coal endeavours; bank on it.
In March 2011 Mr Jackoff head of the NRC placed a gag order on mentioning FUKUshima and not once on the war on coal did ant here the down side of nuke energy and had they been allowed there would be a war on nuke energy http://www.netc.com/
Yup, now that Zion is moving back over to Europe from their emaciated American colony, and has kicked coal in the teeth, it is time for one of their operators to secure control of that important resource for later use by them in Europe.
This can be done much cheaper now because of Zion's Oval Office puppet regime targeting coal politically, and their banksters' control of the fiat-debts that underpin the coal industry.
Zion is a scheme, not an ethnicity..
When you strip away and destroy the manufacturing base, you are left with natural resource extraction and farming as a base, like some third-world African country.
As much as Soros is an a-hole, he's right.
What will eventually make coal a viable commodity again? Energy.
Today's green energy plans are great, but economically unsustainable. They WILL cause a massive degradation of the economy and an even larger decrease in our standard of living. Green energy is EXPENSIVE. How do we pay for it? With a reduced standard of living.
It's going to take a decade or two before it becomes obvious the ruin green energy will cause, but it's coming.
Coal is a readily avaialbe and cheap SOURCE of energy. Green energy isn't a source, it's a method of conversion, and an inefficient one. Hence the substantial costs.
And this is why Soros and tribe make the bucks, they're not affected by the soft headed memes they feed others, he knows perfectly well it's a scam, that when the green energy bullshit runs its course of economic ruin in the Anglo/West, who are now fully harnessed debt donkeys, that 9 billion people will still want reliable coal and gas, because it's cheap as chips, and he's going for margin into Asia, long-term. He and his are not interested in one commodity cycle, he's interested in the next 10 commodity cycles. Because that's how you can take long term power for centuries, just like Rio Tinto has (another tribe company). And the largest RE company in Australia is "Elders", and it was set up by the tribe, and the name itself refers to The Elders of the tribe.
Dumb fucks dream of green energy.
Bankrupt the coal industry then buy it at bargain basement prices. Epic criminality. RICO the whole mother******* lot of them.
Across the industrial North there are tens of thousands of masonry buildings that were heated with coal fired boilers. It was a simple , powerful and inexpensive way to heat. Trying to heat those old buildings with fuel oil or natural gas is damned expensive. In reality, coal may be the least destructive to the biosphere as any of our other energy sources. It is far preferable to nuclear.
Edison did the same thing with AC power. Demonized it to death and then took it over making a killing. It was done in the steel industry the same way with rails for the trains. I call it fiat magic. Its no mystery to me how so much control ended up in so few hands. You build a better mouse trap? Then these same dickheads swipe it.
They want control and have done whatever it takes to get and keep it. If they must they will simply change the rules to take it all.
barry used EPA to shut down coal in the US and Soros paid barry a huge kickback for his assistance.
these two socialists should be shot dead on site.
barry is trying to control oil out of Iran through billions paid to Iran - at taxpayer expense - hasn't passed Congress - not sure if this will even make it there.
He must be betting on the Apocalypse.
You guessed it. Divine Wind. As you say, "when TRUMP crushes the field in the next election, he will undo many of the idiotic policies [related to coal]".
Low coal prices are driven extra low because of the 'climate change' witch hunt against coal burning.
Fact is the globalists are using weather scare-mongering as an excuse to usher in the Weather Police as the new Global Authority.
That's why they're using chemtrails and HAARP to drought CA and 40% of the US with this unusually hot summer.
Trump recently announced that 'climate change' was a hoax and that's because this spooky weather-scare campaign is not getting traction amongst the public.
Soros knows coal is coming back because it's the cheapest fuel and it's at a bottom. He knows 'climate change' is a hoax because he works for the globalists deceivers.
With a fortune at $24B, Soros is still old and ugly and nature gets it's revenge for a lifetime of crime, deception and service to the heinous oligarchs.
Although small consolation to us peons, as the old saying goes, as you age "you get the face you deserve".
With all the global warming hoopla, only an idiot would invest in coal. Unless... maybe old Georgie boy has some evidence up his sleeve that proves it's a farce.
Or is betting on new technology.
No worries Droogs,
Jorge Soro's on "The List."
We know where he lives.
We sit in every audience where he speaks.
We watch him go in and out of the Temple.
We know every move.
Of course he knows that after Old King Coalbama is gone, coal is back.
Soros is covering shorts, he is not going long.