Three conditions usually create asymmetric opportunities in public markets. Sentiment has to be bad enough that stocks, especially in certain industries trade at depressed multiples regardless of fundamentals, the underlying supply and demand has to be structurally favorable, and management teams have to behave in ways that reward shareholders. All three are present in the coal industry today. During the past year plus, I’ve spent a decent amount of time writing and talking about energy related investment themes, including coal, oil and gas and other commodities. I’m attracted to situations where the supply / demand imbalance is so severe, that it doesn’t require heroic pricing assumptions for things to work out well. Bonus points if broad supply disruptions could cause prices to skyrocket, and double bonus points if the sector is hated.What I like even more is when an industry transforms from one of capital intensive exploration to stabilized production, robust cash generation, and capital returns. We’ve seen this dynamic play out among oil and gas producers, coal companies and various other commodity and royalty focused businesses. I will be sharing another idea that fits this pattern in the coming weeks. Keep in mind, I’m not an energy or commodity expert, but wanted to share some more thoughts along with a few interesting coal related ideas that seem to be stranded assets on the wrong side of the energy transition. Mohnish Pabrai has talked about coal being a ‘four letter word’ in the investment industry. Years of ESG focus and capital starvation has completely curbed new production, and investment capital has flowed away from every section of the industry. Banks won’t finance new coal projects, pension funds can’t invest in the companies, most fund managers have to avoid coal, and most coal businesses aren’t able to take on debt for the same reasons. Even if these shifts were to reverse, new mine permitting takes 7-10 years before factoring in the costs of development, so the current supply, with slight exception is essentially fixed for the back half of the decade, if not longer. This all comes during a time when the world consumes record amounts of coal, given the need for low cost, baseload power, along with metallurgical coal for steelmaking, of which there is no replacement. Although the US coal consumption increased double digits during 2025, demand from here will be largely driven by places like Southeast Asia and India, growing mid-to-high single digits during 2024 and 2025. On the met coal side, India plans to expand crude steel capacity from about 200 million tons to 300 MTPA by 2030, with roughly 64% of new capacity using the coal-intensive blast furnace route. India’s Steel Secretary projects coking coal imports rising from roughly 75 million tons today to 160 million tons by 2030.During 2026, the world is once again on track to consume record amounts of coal, while production figures have declined nearly -2.0% from this time last year. There will be a time when the world no longer needs thermal coal, and to a lesser extent met coal, but those days are far away, and in the meantime, there are plenty of reasons to be bullish these commodities, with artificial intelligence adding yet another given the datacenter boom and widespread need for low cost and effective baseload power.I believe that the AI angle for US and global power generation is still somewhat overlooked by investors. There are both data points and anecdotes that point to significant continued demand from here. U.S. data center electricity demand is projected to grow from 176 TWh today to as much as 580 TWh by 2028. Meta has signed deals supporting up to 7.8 GW of nuclear power, while Microsoft is reopening Three Mile Island Unit 1. Google signed the largest corporate nuclear PPA in history with Kairos Power. OpenAI wrote to the White House in late 2025 calling for the U.S. to build 100 GW of new generation capacity annually, or roughly 100 nuclear reactors per year. None of this existed 24-36 months ago.I will share more about AI and energy in future posts, but the point is that significant demand combined with a fixed or declining supply should bode well for prices moving forward.The behavior of various management teams is what makes the current cycle different from prior peaks. Historically, commodity cycles ended because producers responded to high prices with aggressive capex that ultimately created the next downturn. That dynamic is materially absent today. The producers I own are returning capital rather than building new mines. This is an almost unheard of dynamic given how the industry operated historically, but across the coal space, you’ll find management teams talking about things like shareholder value, free cash flow per share and accretive capital returns. The ideas discussed below all feature some form of capital returns that should bode well for intrinsic values over time.Below I discuss four ideas that are incredibly compelling at today’s prices, and use Trata to discuss one of the ideas, quoting analyst to analyst calls regarding the bull case.Trata gives hedge funds un-biased, unfiltered stock analysis from anonymous analysts at well-known funds. Trata captures analyst thinking via interviews, and publishes transcript libraries full of content and insights. Trata is the only product I’m aware of that matches analysts and portfolio managers with each other to discuss a business, with each taking a bullish, neutral or bearish stance.I’ve been a long time user of Trata, and one thing I’ve noticed recently, or keep noticing, is that the amount of calls being done has increased tremendously, and the number of companies with calls done is growing by the day. All positive signs of a growing platform.