Ann: Quarterly Activities Report, page-31

Just reflecting on this mid Jan 21 AFR interview:

Jan 19, 2021 – Out-of-favour stocks with proven earnings are tipped to deliver this year, says the co-founder of Collins St Asset Management, Michael Goldberg, whose value fund was the top-performing long-only Australian shares strategy last year.After a year dominated by a heated growth-led recovery, the value-oriented boutique is positioned to capitalise on renewed interest in cyclical exposures, backing names such as metallurgical coal miner Coronado Global Resources.Michael Goldberg's Collins St Value Fund topped Mercer's 2020 fund manager rankings for Australian equities. Eamon GallagherCollins St Value Fund beat 130 other strategies to take the top spot in Mercer's survey of fund manager performance for 2020, with a 12-month return of 43.6 per cent before fees.Coronado is among the high-conviction positions held in a portfolio limited to just 10 exposures, and is a marker of Collins St's focus on earnings over sentiment.The failure to distinguish between met coal as a steel-making ingredient and thermal coal, which has been the focus of efforts to cut the emissions intensity of electricity production, has created an opportunity, Mr Goldberg said.Advertisement"When people talk about coal they lump it all into the same basket. But here's an asset that is actually incredibly important to infrastructure going forward – it's one of two key ingredients into steel."Every tonne of steel made in a blast furnace – the dominant production method – uses 780 kilograms of met coal.But while iron ore miners have been riding a wave of record prices, met coal miners have struggled under the weight of informal import restrictions from China.'Still many opportunities'The weak commodity prices resulted in a 40.9 per cent drop in coal revenue for Coronado in its last half-year report, which the company partly attributed to the impact of China's import restrictions on its US exports.But with the trade in met coal expected to rise by 55 million tonnes over this year and next as industrial production recovers, prices are expected to recover, according to the Office of the Chief Economist.AdvertisementThe push to reduce the emissions intensity of steel – each tonne produces about 1.85 tonnes of carbon dioxide, equating to about 8 per cent of global carbon dioxide emissions, according to McKinsey – is also not a concern for the fund manager.With steel production still heavily reliant on coal as an input, the stock picker said the earnings outlook for exporters is unlikely to change in the short term. And if it does change over the longer term, Mr Goldberg said, the fund is ready to respond.