- Goldman Sachs downgraded a number of coal firms, arguing that coal companies are trading at peak historical multiples and that coal supplies will come to the market faster than bulls may expect.
Myself, while I can agree with this call in the very near term (the stocks are very overextended) I disagree 100% long term - and although I've lightened up a bit on this large run in the sector I want a lot more exposure for the long run. I have been eyeing Arch Coal (which Goldman put on its Conviction Sell list) [I Keep Waiting for the Pullback in Arch Coal (ACI) That Never Comes], so I am going to use today's 5% pullback to begin a small stake near $49. I am only buying 200 shares so this is a 0.9% stake.
I am in no rush, and am hoping for a pullback to the 20 day moving average (near $47) or even better yet the $43s area (50 day moving average), at which point I will increase this stake. I believe a lot of fast money (i.e. Johnny come lately money) has come to the sector lately and in any downturn they will flee quickly like they always do, potentially creating much more attractive entry points.
Again, I lightened up this sector on this run, but I did want to add another name to my long held basket of Peabody Energy (BTU), Consol Energy (CNX), Massey Energy (MEE), and Mechel (MTL).
Long all names mentioned in fund; long none in personal account
