Posted 13 April 2007 - 10:44 AM
Ahoy JG,
I actually like Fording Coal here. Don't own it but have long followed it because of the sometimes enormous dividends. Last I saw it was paying out 65% of distributable cash, so barring a fairly bad coal price decline I think the dividend is safe for now.
Last year $4.15 Canadian per share was paid out, now it's going at a $2.60 pace.
I'm bullish on coal again, and also like ACI, BTU, and CNX as investments, probably would put BTU on top. A recession in the US would be hard on energy prices, especially coal, IMO, but the US is less and less of the world energy equation all the time. The charts rule, as always, and I think we'd see the problem there before any general acknowledgement of us being in a recession. Hmm, I just looked and CNX has done a lot better recently -- I don't know what that's about.
I do not at all think we are headed for the Fed raising rates. Only question IMO is when they will cut. Maybe last quarter of this year -- don't know and don't care much, just guessing.
I think that November was a bottom for FDG, even though it hasn't done much to the upside yet. Most issues would have me thinking that this was just a sideways move in a larger still-ongoing downtrend, but the 10% dividend makes a big difference, and I think that and coal prices have put a pretty good floor price below.
As with most trusts, I feel all the bad news is priced in and more than priced in. The retail and odd-lotters have been selling and institutions have been buying, by the way -- I don't know the specifics of FDG but for many trusts that is the case recently.
With crude oil, I'm looking at a possible reverse Head and Shoulders bottom on the charts but I'm still wary. "All in" on energy but still wary....
Best,
Doug
