Why You Should Short Coal

In recent years, environmental activists have demanded that universities, foundations and other institutional investors divest their shares of coal, oil and gas companies. The institutional response has been tepid. Financial analysts point out that if these investors sold their holdings, other investors would simply obtain them at bargain prices, leaving the divesting institutions with less diversified stock portfolios.

Although stocks of clean energy companies have proven to be good investments, fossil fuels will still be used in abundance over the next 20 years. And someone will make a lot of money producing them. But is it really prudent to hold fossil fuel stocks -- especially coal? What if divestment of coal, oil and gas is actually the smart long-term bet?