Monday, January 10, 2011

BlackRock's Rice Sees Coal Stocks Doubling as Oil Nears $100 (KOL; MEE; RRC; HK;)

And here I am patiently waiting for a short-side entry point.*
From Bloomberg:
BlackRock Inc.’s Daniel Rice, who beat 99.9 percent of U.S. stock-fund managers over the past decade, said an expanding global economy will probably push oil prices above $100 this year.

The gain may lift shares of oil and gas companies by 25 to 30 percent and help double the price of coal stocks, the manager of the $1.5 billion BlackRock Energy & Resources Fund forecast in an interview in his Boston office. His biggest concern, Rice said, is what happens if oil rises even higher.
“I will be bullish on the stocks for part of the next surge, but I won’t be if oil gets to $120,” said Rice, whose fund returned 18 percent a year over the past decade

Crude topped $92 a barrel Jan. 3, the highest in 27 months, helped by an economic rebound, stock market gains and a decline in inventories. Rice, the longest-serving manager of a U.S. energy mutual fund, according to Chicago-based Morningstar Inc., said oil may rise high enough by 2012 to trigger a global economic slowdown, much as it did in 2008 when oil reached $145 a barrel.

“If the world keeps growing at this rate, it strains the whole system,” said Rice, who believes an oil price between $85 and $90 a barrel is the most the world can tolerate for an extended period. “There just are not enough commodities to satisfy the demand.”

A dollar invested in Rice’s fund 10 years ago would be worth more than $5 today, according to data compiled by Bloomberg. Only three out of more than 4,000 U.S. mutual funds did better in the 10 years ended Dec. 31, according to Morningstar.

*Dec. 22
Dear Santa: Please send me a 2% down move in the major averages (ANR; BTU; KOL)
Starting at 3:00 pm EST.

I'm thinking of a very short term bet against the coal stocks or the coal ETF (KOL).

More in the next post.
Current prices (go up! go up!)
KOL down 17 cents at $46.19
ANR up 72 cents at $55.82
BTU  down 21 cents at $63.53
DJIA 11,545.72 
SPX    1,257.80

Thank you.
KOL is currently $49.89; ANR $64.49; $61.56. I'm still waiting. Patiently.
When will those Australian floodwaters recede?
Very patiently.