Coal Miners Struggle to Survive in an Industry Battered by Layoffs and Bankruptcy

WAYNE, W.Va. — There is pain across the nation’s coal fields, but here in West Virginia, the disruption is particularly acute.

Mines are closing almost every month. Sawmills that provide wooden support beams for the tunnels are laying off workers, and diners are putting up signs asking their customers to pray for the miners.

The coal industry, long the heart that pumped the economy here, is in deep trouble, buffeted by power plants switching to cheap natural gas, crippling debt, mounting foreign competition and increasingly strict regulations to limit greenhouse gases and toxic emissions like mercury.

“It’s just the times we are facing,” said Mitchell Maynard, a miner, as he left the Camp Creek mine recently after one of his last shifts before he and more than 400 of his co-workers lose their jobs.

Mr. Maynard, who wears a large tattoo on his upper left arm showing a joyous Jesus embracing a blissful miner, has been contemplating what he will do to support his family since he learned last month that the mine will close for good. He has yet to come up with an answer, but he has not lost hope. “I know I will find guidance from the Lord,” he said.

Mr. Maynard’s once-mighty employer, Alpha Natural Resources, and the entire coal industry could use some divine intervention right about now. The most immediate challenge to the coal industry is the hydraulic fracturing revolution that has produced a glut of natural gas over the last four years, making the fuel cheaper to burn and stimulating a relentless switch by utilities away from coal.

Since January, six domestic coal producers have filed for bankruptcy, including Patriot Coal, which applied for Chapter 11 for the second time.

The decline has taken a heavy toll here in Wayne County and the surrounding area in West Virginia and Kentucky, where roughly one in three of the nation’s 80,000 coal miners work.

Read the rest.

http://www.nytimes.com/2015/07/18/business/energy-environment/coal-miners-struggle-to-survive-in-an-industry-battered-by-layoffs-and-bankruptcy.html?ref=business&_r=1

Why Work If You Can Just Trade

China announces they will be setting new gold price by end of year

On June 25, a representative from the Shanghai Gold Exchange announced that they are planning on establishing a new physical gold price mechanism by the end of the year that will compete with London and the U.S. Comex. Expected to be denominated in Yuan, this new gold price platform comes less than 10 days after China became the first Asian country invited to be a part of the London gold fix, and unlike the U.S. Comex, will deal in direct physical gold sales rather than in paper futures and derivative contracts.

When the Shanghai Gold Exchange (SGE) opened in 2014, it set out to usurp the West’s control over gold and their pricing of gold through the paper markets. And in less than a year, the SGE has created the world’s largest gold fund, and is now ready to take over pricing and price discovery for the monetary metal. In fact, sources claim that right now premiums on large sales of gold bullion are ranging as high as $600 over the current paper spot price.

Read the rest

http://www.examiner.com/article/china-announces-they-will-be-setting-new-gold-price-by-end-of-year

Bubble Mania 3.0 – Playboy Girl Obsessed with Trading Stocks

We are experiencing the third bubble in 15 years.

Meet the Playboy ‘Playmate of the Year’ who has become obsessed with trading stocks

Playboy’s 2014 “Playmate of the Year,” Kennedy Summers, recently found a passion for day trading.

“I love trading. I can wake up and make sure I can make money and still pay my rent,” the 28-year model and actress said during a telephone call on Wednesday morning while getting her makeup done for a TV show shoot in Los Angeles.

Back in April, Summers was approached to be a speaker at the Equities.com Small Cap Stars Spring Conference, which took place in Times Square in early June.

Ahead of the event, Long Island-based Cyber Trading University trained her in day trading for free. (They do not pay or sponsor her, she said.)

“I got hooked on it,” she said.

She added that she finds trading fun and exciting. She also admitted that it was “terrifying” at first.

June 2015 Issue of Ultimate Value Finder is Released

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Investment Opportunity 1 – Finally a Good Strategy for Profitability

I have had my eye on this company. This was after the IPO. I didn’t like it. It was priced for perfection and it was too early to disappoint investors. I even wrote an article about how the negatives outweighed the positives.

When I wrote the article, the company’s stock was popular and trading for $20 per share. Today, the stock price is $6.50 per share. It has exhausted investors so much that I don’t see much downside from here. Actually, now, the entire company is priced in a way that one of the business segments is worth more than the enterprise value. Even if the company’s turnaround strategy is only marginally successful, the stock price has nowhere to go but up.

Investment Opportunity 2 – In the right place at the right time

You might have a company that is in the business of doing something for decades, but no one cares. Then all of a sudden, people start to care. You see this happen all the time. Ten years ago, I never heard anything about organic food, but now it is in vogue.

Company 2 has been around since 1961 making control technology for electric vehicles. It had some niche customers, but overall, the company was barely making anything. Now, all of a sudden, the tide has turned. Electric cars are becoming more popular. Revenues are accelerating and investors are getting excited. As a result, the company is generating excitement among investors. As one analyst said on one of the conference calls, “It looks like the company is really beginning to take off.”

Investment Opportunity 3 – The Common Equity is Worthless

Over the last two years, I have been getting e-mails from various investors about how I should look at Company 3. I was told that the company has great projects, competent management, and a bulletproof business plan.

Well, I did look at the company many times, but I did not have the urge to write about it. I thought to myself, “I’ll wait until something goes wrong, as it always does in mining.”

And, boy, oh boy, did things go wrong. As a result, the stock price is down 87 percent in the last couple of months. When I first heard about the company, the stock price was $1 per share. Today, it is $0.07 per share and I think it is going to zero.

If you are a subscriber, you already received an email with the full June issue.

It Is Always about Recoving in the Second Half

I don’t know if one should laugh or cry when listening to these guys on CNBC. The cheap oil price will stimulate the economy in the second half of the year. At least they realize that the recent job report was bad. This is of course until the stocks go up on this news on Monday.

Weakest Job Report Since 2013

It is too bad that the market is not opened today because I would have loved to see the reaction to the weak job report.

Anyway, here are the first three articles on Google Finance.

US job gains weakest since 2013

First Take: Jobs report may give Fed pause

US Economy Gained 126000 Jobs in March, an Abrupt Slowdown in Hiring

Again, everybody is surprised and shocked. How could it be possible that the economy is slowing down when the Fed and all the other experts say that the economy is about to enter an escape velocity. Because there is no recovery just like there is no Santa. The recovery that everybody talks about is not a recovery. It is all fantasy created by cheap money or QE. Now that the Fed removed QE, it removed the fake recovery. Let me get to some quotes from these articles.

From the first article.

“U.S. employers added the fewest number of jobs in more than a year in March, which could heighten concerns over the recent slowdown in economic growth and delay an anticipated interest rate increase by the Federal Reserve.” You actually thought that the Fed was really going to raise rates.

“There’s no question that the economy is showing the negative effects of the stronger dollar and the collapse in oil prices. Corporate profits have come under pressure, and hiring has been adjusted in response.” The stronger dollar happened because everybody incorrectly believed that the economy was strong and that the Fed was going to raise rates. I thought that the collapse in oil prices was supposed to make people spend more.

“The paltry job gains could fan fears that the recent weakness in economic activity could be more fundamental rather than due to transitory factors.” It is 100 percent fundamental. The Fed has destroyed the economy by stimulating it for the last 20 years. You think the dot com bubble and 2008 crisis was an accident? It was all created by the Fed and the next crisis is in the works which is also being created by the Fed.

From the second article.

“For investors, the March jobs report means that the Federal Reserve’s first interest-rate hike could be slowly receding in the distance.” Really?

“It’s definitely a disappointing report. It really was under any estimate you could find.” Wow. Nobody predicted it. Yes, if you watch CNBC, then nobody predicted it. I follow plenty of people who have been talking about it for a long time but nobody took them seriously.

“Add the soaring dollar to the disappointing jobs report, and you have a Fed that’s unlikely to raise interest rates at its June meeting.” Just wait until the economic data gets even worse because this is just the beginning. You will get QE 4 not a rate hike.

From the third article.

In the title, it says “an Abrupt Slowdown in Hiring.” LOL. There was never any growth in true employment. All the economy was doing was adding low-paying, part-time jobs and losing high-paying, full-time jobs. Read the full job’s report, not just the headlines.

“The labor market’s yearlong streak of robust monthly job creation was broken.” It is not even worth commenting.

“Analysts blamed the punishing weather in the Northeast as well as the plunge in oil prices.” Of course.

 

 

 

 

Chinese Yuan As a Reserve Currency

China has just taken another dramatic step to attack the U.S. dollar. (Quickly developing story).

In an unexpected move, during last Sunday’s meeting with the IMF, the Chinese government proposed making the Yuan a global reserve currency.

And the very next day, a second meeting was conveyed on the initiative where the IMF’s Managing Director Christine Lagarde declared that “We welcome and share this objective, and we will work closely with the Chinese authorities.”

Click here to read the rest.

April 2015 Issue of Ultimate Value Finder is Released

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Investment Opportunity 1 – Liquidation Value Six Times the Market Cap

Sometimes when you buy an asset, whether it be a car or a piece of equipment, the value of it is what you could liquidate it for. The asset does not necessarily need to create cash flow. For example, if you go to Home Depot to buy an electrical saw, you don’t look at how much cash flow it can generate for you before you buy it.

Many times, on Wall Street, an asset needs to generate a certain amount of cash flow in order to support its valuation, unless of course, we are talking about Facebook, Twitter, or GoPro. These can trade at whatever valuations someone can dream of.

Company 1 owns an equipment fleet that it rents out to contractors during various construction projects. Because the company is incapable of satisfying investors with enough cash flow, the company’s market cap is way below its liquidation value. In other words, if the actual equipment were to be liquidated today, the shareholders would receive about 6 times more money than what the company is trading for.

Investment Opportunity 2 – Now It Looks Really Interesting

This is a new idea for Ultimate Value Finder. However, I looked at this company sometime in 2013. I studied it but decided to pass because things were just so awful that I could not make myself write about it. Fast forward to today and the company finally looks interesting.

First, the price is 70 percent cheaper which is always a good start. Second, certain segments of the company are growing while the legacy segment is declining. And third, a brand new business was launched under the company’s umbrella, and this business could become big.

Investment Opportunity 3 – Transitioning from Development to Growth

Everything in life goes through different stages: development, growth, maturity, and decline. This also applies to companies. However, investors are not interested in all the stages because they are all about making quick money. Development is not something that they want to be a part of because it requires patience, hard work, and capital. Maturity is boring, unless, of course, they are private investors getting all the cash flow. Decline is not even in their vocabulary, so let me skip that.

They want growth because growth is the heroin that keeps them up all night. Company 3 is leaving the development stage and entering the growth stage. This means that you have an opportunity to acquire shares when revenues are tiny and hold them until they grow, generating the excitement. Also, you have a lot of exhausted investors willing to sell shares after years and years of disappointment, dilution, and lack of payday.

If you are a subscriber, you already received an email with the full April issue.

Economic Data Getting Better and Better

It is very interesting to watch various economic data reports and how they are getting worse and worse. I mean this is on a daily basis. Today, we got durable-goods orders fall 1.4 percent.

To some people, this is no surprise because they understand that the whole economic recovery is fake. It was created by several rounds of QE which caused tremendous disallocations of capital. Now that the QE was taken away, the fake recovery is falling apart.

Others who believe that central bankers saved the economy in 2008/2009 are confused. Well, they will get more confused as the economic data continues to worsen. Then, they will be shocked when the Fed announces another round of QE which will not work either.