First, thanks for a reader for highlighting this story.

Second, I always like when smart people who have made a lot of money agree with my thesis that aside from being great secular growth stories, that any day one can wake up and find your coal stock a target of acquisition.

Third, the stock prices in the short run have very little to do with the long run. I continue to stand by these names as the hedge funds tell us the world is slowing (gosh I was on that beat 9 months ago, glad they finally caught on) and its time to buy Citigroup (C). Oh and by the way, the world was not slowing 4 weeks ago when these stocks were the apple of everyone's eye. It just slowed about 2 weeks ago. Sure.

• Cleveland-Cliffs Inc.'s $10 billion takeover of Alpha Natural Resources Inc., the biggest in the coal industry, may unleash a wave of acquisitions in a business where it's proving cheaper to buy than to build.
• Coal company shares typically trade at a discount to the value of their reserves to reflect mining and transportation costs as well as the life of the mines.
• Peabody Energy Corp.'s deposits of 9.3 billion tons, the world's largest, are worth at least $146 billion at today's market prices, while the St. Louis-based company's stock is valued at $19.6 billion on the New York Stock Exchange.
• Massey Energy Co.'s reserves total about $240 billion, compared with the $6.25 billion valuation of its shares.
• Arch shares rose 33 percent this year. The company's reserves are worth at least $47 billion, compared with its stock value of $8.6 billion.
• The top eight U.S. coal producers, worth more than $50 billion, are still up for grabs. (to put in perspective, this is a fraction of the Exxon's or Chevron's of the world - in fact it's less than either of the major potash producers we own)
• ``In the next 12 months there will be an unprecedented amount of both domestic and cross-border mergers and acquisitions,'' said Wilbur Ross, chairman of International Coal Group Inc.