The Stock That Cannot Be Bought
Inside the quiet disappearance of Alpha Metallurgical Resources
“To me, it’s obvious that the winner has to bet very selectively. It’s been obvious to me since very early in life. I don’t know why it’s not obvious to very many other people.” - Charlie Munger
As many of you know, I live and work in Germany.
Germany is a country with one religion. No fossil fuels. Own less. Consume less. Want less. Build less industry — and paradise follows. I don't have a clean name for this ideology. Green degrowth? Eco-utopian self-destruction? Whatever you call it, the core belief is this. We don’t need fossil energy. People don’t matter. Children don’t matter. Industry doesn't matter. What matters is a beautiful planet.
Germany has been so convinced of this vision that it exported it. To Australia. To California. To Brussels. The ideology now has citizenship in places that should know better.
So picture this. It’s 2022, maybe 2023. I’m sitting with some German colleagues — smart, educated people — and they ask me what I’m investing in.
I tell them I found this coal company in America. 🙂
Every single one of them turned around and walked away. No argument. No debate. Just silence, and then empty chairs. I sat there alone with my coffee, completely abandoned. And I remember thinking — man, I am completely alone here. Nobody wants this. Nobody. Not my colleagues, not the funds, not the media, not the politicians.
One guy even came back to give me that look — you know the one. Polite smile. Slow nod. Mental note: this guy is gone.
(Reader, it was right.)
Everything That Could Go Wrong Is Going Right For Alpha
I don’t want to spend too much time on macro. But right now, the tailwinds behind Alpha are enormous and I would be doing you a disservice if I didn’t mention them.
Australia is running out of diesel.
The world’s largest coal exporter burns 12 million liters of diesel every single day just to move that coal. Trucks. Trains. Ports. All diesel. If the Strait of Hormuz stays closed, Australia may not be able to physically export coal. I don’t know what happens to met coal prices when 50-60% of global supply disappears. But I know it is not nothing.
Taiwan, Vietnam, South Korea — days of energy reserves. Not months. Days.
When ideology meets an empty tank, ideology loses. Every time. They will burn whatever they can find. And here is something most people don’t know — metallurgical coal is caloric enough, clean enough, that you can generate electricity from it in an emergency. Demand that was never in anyone’s model suddenly shows up. We saw this movie in 2022. Russia invades Ukraine, gas flows stop, everyone panics, and met coal trades above $600 per tonne. Nobody had that in their spreadsheet either. And Germany — the country that spent two decades telling the world that coal is a moral catastrophe — wants to restart coal plants at full speed. 🙂
There is also a real chance of a serious recession. Maybe stagflation.
Most people see this as bad news for coal. I see it differently. A prolonged downturn destroys high-cost, debt-laden producers first. Supply disappears. Alpha — no debt, $500 million in cash, one of the lowest production costs in the industry — walks out the other side alone. For low-cost producers, a wave of bankruptcies is a gift. The result will be significantly less metallurgical coal on the market.
Don’t Tell Me the Upside. Tell Me How I Lose My Money.
For Alpha, I see some risks.
The first is technology. Someone finds a cheap alternative to coking coal. This is the only risk I take seriously over the long run. But we are nowhere near that. The second is demand collapse. A recession so deep that construction and steel mills stop for years. Possible. The third is a black swan on infrastructure. An attack, a natural disaster, force majeure.
And then I ask myself one question.
What are the odds that India won’t need met coal for the next ten years — compared to the odds of a nuclear war? Because if the answer to the second is higher, we probably shouldn’t be talking about portfolios at all. At the end of the day, you have to make a decision and weigh probabilities between risk and reward. Nothing is guaranteed, and nothing comes without risk.
What is unfolding right now is, in my view, one of the most important developments for Alpha. So please — find a quiet corner, put everything else aside, and read what comes next slowly. That is genuinely all I ask.
Because if this plays out the way I think it will, it could change your financial life.
