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XMFSinchiruna (26.53)

The Ultimate Commodity Update



March 05, 2010 – Comments (6)

Joy Global has outdone itself ... yet again.

"Looking to coal, Joy Global reiterated Peabody Energy's interpretation of a major structural shift in these markets, driven by China's transformation into a net importer of both thermal coal and coking coal. Total Chinese coal imports reached 100 million tons in 2009, but this is merely the beginning of a long-term trend."

"Joy Global reports that Coal India -- reportedly the largest coal producer in the world -- now anticipates annual import demand from India reaching an incredible 200 million tons within the next few years. A recently reduced outlook for domestic production drives this bullish call. Fools will recall that industry expectations for Indian import demand for coal in 2013 stood at just 80 million tons as recently as June 2009. With these sorts of multiyear drivers in play, it's no wonder that producers in places like Australia are pulling out all the stops to ramp up export capacity. As I have stated previously, I consider investment exposure to Pacific basin seaborne coal one of the most attractive opportunities for investors today."

"Of course, all of these bullish long-term indicators for commodities like copper, iron ore, coking coal, and thermal coal result in a strong business environment in which mining equipment rivals Joy Global and Bucyrus will continue to vie for dominance. After a key strategic acquisition, I see Bucyrus with the upper hand, but Joy Global's $0.20-per-share upward revision to the low end of its 2010 earnings guidance reminds Fools not to underestimate the happiest name in mining equipment."


6 Comments – Post Your Own

#1) On March 05, 2010 at 10:36 AM, XMFSinchiruna (26.53) wrote:

Both commodities and precious metals are making a strong contra-dollar moves today. 

In times like these, Yawanna Keep Yamana

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#2) On March 10, 2010 at 3:51 AM, puccini3005 (30.27) wrote:


Speaking of stocks you like, could you give us an insight into your open green thumb on dry ships?  That was a surprise... I'm no stranger to your opinion of them, most recently here:, and couldn't find any recent pennings of yours reversing your position...  Just curious.  Thanks!

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#3) On March 10, 2010 at 5:05 AM, ragedmaximus (< 20) wrote:

what about all the earthquakes and infrastructure damage,wouldn't that mean a spike for the STEEL stocks even if they recently doubled since november,I see 100 bucks for X us steel and 50 for aks in this year 2010!

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#4) On March 10, 2010 at 9:53 AM, silverminer (30.05) wrote:


Steelmakers are likely to continue to face difficult margin pressure even in the midst of price increases. Among the major drivers of price increases, impacts from the Chile quake will scarcely be felt compared to the massive increase in prices for iron ore and coking coal presently pending.


I understand your confusion. Remember, CAPS is a game. :) I added DRYS partly in jest ... just to show that any Fool can speculate in a stock like DRYS and probably catch the occasional pop. As it turns out, the joke is on me, since I expected to close my pick within a couple of weeks. I simply thought the stock had been driven down too far in the most recent bout of BDI weakness, and I saw near-term strength hitting the BDI for a month or two. That's what I get for speculating, and this should highlight for everyone why a stock like DRYS remains 100% unsuitable as a serious investment vehicle.

Now, mind you, if they get even one of those four unsecured drillships into an attractive contract, that stock will move higher ... possibly with exceptional vigor. But the fundamentals of unattractive debt exposure in the midst of a sectorwide contraction bodes extremely poorly for DRYS.

I have no real life position in DRYS, nor do I ever intend to. :P

TMFSinchiruna (aka silverminer)

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#5) On March 11, 2010 at 6:52 AM, puccini3005 (30.27) wrote:

thanks Sinch!  point taken.  while we're on the subject of the game, long have I wondered why you so rarely issue red-thumbs on stocks.  I'm guessing that list could be potentially very long for you....  BTW looks like that DRYS pick is doing well, the whole sector got a boost yesterday.

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#6) On March 11, 2010 at 5:42 PM, XMFSinchiruna (26.53) wrote:


Yup, I closed out that DRYS pick on the boost ... good riddance. :P

In fact, I have never issued a red thumb. Both TMFSinchiruna and silverminer portfolios are very proud of their "Yes Man" charms, and both portfolios have stood at the top of that list at one time or another.

Since I don't short in real life, I don't short in CAPS.

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