The dying black gold is coming back

I’m talking about coal, used to be the major source of energy, and probably still is one of the major energy sources used for generating power in the US. In the other parts of the world where oil is expensive and scarce, coal continues to be almost the only economic energy source. But in the past few years, coal has been slaughtered to almost death in the US and most of coal mining companies are either already bankrupt or struggling to survive. For one reason, oil and natural gas have become increasingly cheaper and are certainly much cleaner for the environment. So the demand for coal has been substantially cut back. On top of that, the more devastating force to kill the coal industry is probably the regulations from the previous administration. OB in generally was very much against business as a whole and for coal, he virtually wanted to kill it outright. There have been many very stringent regulations issued by OB that basically would not allow the coal companies to be able to economically survive. The thing is, coal is still a vital energy commodity. Like it or not, the demand is still there. When the sector reached the abyss point, it will become too cheap to ignore. So silently coal has started to come back. Looking at the 10 year chart of the ETF for coal companies (KOL), it has doubled without much attention last year. While it sounds a lot and too late to get in, it still has a lot of room to go up, I think, considering how much beaten down this sector has been.  If anything, I believe KOL’s next leg up may be accelerated in the next few years. One main reason is what Trump is doing: kill the business unfriendly regulations. The impact is almost immediate as I have seen reports telling the stories of re-opening of coal mines throughout the US. I think the trend will continue with accelerating pace with less and less regulations for the business along with more friendly corporate tax moving forwards. The sentiment for the coal industry has been substantially improved, so will be for the coal mining stocks. This is probably another multi-year long-term uptrend in brewing!