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Venture Capitalists, Check Out Coal, Gold and Shipping Stocks

NEW YORK (TheStreet) -- Coal, gold mining and shipping sectors are appealing right now to venture capitalists. These daring marketeers will invest in a wide range of companies, hoping one or two become the next Amazon (AMZN) or Google (GOOG)


The most prominent example of an individual doing this in stocks was the legendary investor Sir John Templeton during The Great Depression. He bought 100 shares of every company on the New York Stock Exchange selling for less than $1 during the Great Depression. When recovery came, he made his fortune.



It is much easier to do what Templeton did than to accomplish what a venture capitalist must do to profit. For investors buying stocks, it just requires faith that an industry group will not go away for good. The three sectors cited above are now offering the potential for long term gains after recovery. Rather than seek out each individual stock, look at the sector funds.

None of these are going away forever. But the exchange traded funds for each are down in the present bull market rally: Market Vectors Coal (KOL) is off by 0.46% with the Standard & Poor's 500 Index (SPY) up more than 9% for 2014. iShares MSCI Gold Miners (RING) is down more than 3% for the last year. Close to $29 in June 2010, Claymore Delta Global Shipping (SEA) is now trading at less than $22.80.

Many individual companies in these sectors are still struggling. There have been many bankruptcies due to the Great Recession. But it is getting to the point where those remaining firms will most likely survive. That can be seen in how the exchange traded funds for these industries have rallied in recent market action. Claymore is up 4.69% for the last month. Over that same period, iShares rallied by 2.56%. The last four weeks of trading has witnessed a 3.26% spike for Market Vectors Coal.

That should embolden investors to call on their inner Sir John Templeton and look for bargains.

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SYM TRADE IT LAST %CHG
KOL $11.24 0.00%
RING $7.09 0.00%
SEA $18.10 0.00%
AAPL $126.44 0.00%
FB $87.28 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

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