As the finance training dictates, all sorts of loans are loans, whether they are business, or personal loans. Similarly, real estate is a bond that should be saved till the last. Security dealings like travel insurance or even car insurance are exclusively for the entities they insure.
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I’ve been monitoring James River Coal Company for a while and the amazing 1400% run up is something to behold. I congratulate those who spotted this one below 10 and rode it up to the top. Below is 3 three reasons why I think JRCC will continue its bullish uptrend and 3 reasons why I think investors should find the next commodity play.

Reasons to buy:
1. James River may obtain long-term contracts with coal at prices 80+ for 2009, 2010. This means even if the bubble bursts they can maintain their margins

2. Coal prices may continue to soar as global demand especially from Europe and Asia is increasing and the short-term price inelasticity of coal supply because of fixed supply contracts puts JRCC in a favorable position

3. JRCC has expectations of $2.50 per share in 2009, yet the company has posted 8 straight quarters of losses. If a company can rise with negative earnings, imagine its fuel when it turns in profits.

Reasons to not buy:
1. Coal is abundant. There is still enough supply for hundreds of years and this shortage is short term. The current imbalance is really only about a percentage point.

2. Other economies such as China are boosting their coal production due to high prices, once everybody gets in, this will squeeze prices down.

3. Companies without earnings that have run up as large as JRCC tend to bust. .dom bubble anyone?

What do you guys think, technically this is solid

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