Coal ETF (KOL) Could Be Interesting Way To Play Buffett's BNI Buyout
One thing that few are mentioning about Warren Buffett's buyout of Burlington Northern (NYSE: BNI) is the fact that since the railroad firm operates mainly in the western U.S., it is a principle mover of coal to ports on the west coast.
That coal eventually finds its way to Asia, namely China. China's power supply is still coal-fired and demand for coal is expected to increase in the coming years.
While coal is controversial in the U.S. because it isn't the cleanest fuel around, the ETF Professor thinks opportunities exist with the Market Vectors Coal ETF (NYSE: KOL). Top holdings included Alpha Natural Resources (NYSE: ANR) and Peabody Energy (NYSE: BTU).
If Burlington Northern and its rivals move more coal when the economy rebounds, and the Professor suspects that will be the case, then KOL will prove to be a unique way to backdoor today's buyout news without having to own to Berkshire Hathway (NYSE: BRK.A, BRK.B) or Burlington Northern.
KOL is up more than 100% in 2009, but it's probably safe to start a small position now.
