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Alternative Energy Bull Market In Early Stages

The Dynamic Wealth Report
September 3, 2008

A Multi-Decade Trend To Big Money


Last week I wrote about Matthew Simmons.  He’s been talking for years now about the end of easy oil.  Relentlessly, he’s been calling for alterative energy solutions.  In my last article I talked about his take on ethanol.

I knew the article would create some subscriber feedback . . . little did I know the variety of questions I’d receive.

I thought you’d write in with comments about oil.  I thought you’d question my controversial view of ethanol.  Nope.  We didn’t get a single question on those topics.

I did however field a number of questions about alternative energy.

In my career I’ve been asked a lot of questions.  I’ve been quizzed on everything from general thoughts on alternative energy to specifics about membrane based fuel cells.  I’ve been asked about solar, nuclear, wind, geothermal, even fuel cells.

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I’ll tell you more about these in a second.

But, first, we’ve added several thousand new subscribers to our newsletter.  For those of you who don’t know, I spent the better part of a decade working in Investment Banking.

I wasn’t the guy calling you at dinnertime trying to sell you stock.  I didn’t peddle the latest Collateralized Debt Obligations (CDOs) destroying our banking system.

I worked with the CEOs, CFOs, and Board members of small companies. I helped them raise money through private placements and IPOs. I prepared them for meetings with investors who managed billions of dollars. I helped these companies raise millions, and sometimes hundreds of millions, to grow their business.

The money I raised expanded manufacturing facilities, created new jobs, and added rocket fuel to company growth.

I started working with technology companies.  I worked in several industry verticals including software, semiconductors, and telecommunications.  I was based in the Silicon Valley area.  And I witnessed first-hand the dot-com boom, and the subsequent bust.

The last half of my career was focused on alternative energy companies.

You name it - I worked on it.  Solar, alternative fuels, ethanol, biodiesel, wind, geothermal, clean coal the list goes on and on.

I even branched out into environmental areas.

I worked with companies that helped clean the air, water, and earth.  I caught the first wave of “green Investing.”

I even worked internationally.  I was part of a team who launched the first financing for a US fuel cell company on the London AIM stock market.

All I did was breath, eat, and sleep alternative energy for years.

I have lots of opinions.  Some technologies are so far from commercial development it’s laughable.  Others are commercially viable now . . . and investors don’t know it yet.  These technologies will be part of the solution to reducing our dependency on oil.  Other alternative energy technologies are pure bunk.

I’d love to get into all the details about each area.  Unfortunately I only have so much space today.  In the coming weeks I’ll look in detail at many of these industries.  I’ll share with you my insider view and comment on the best (and worst) companies.

For now, let me leave you with a simple thought.

The “Green” wave is here.  You can’t go 100 yards without bumping into a recycle bin.  Advertisements tout “green” businesses and activities.  It’s now become economically feasible to use alternative energy . . . especially with oil over $100 per barrel.

This is a multi-decade trend.  It has legs that’ll run for a long time.  Each industry will have its share of winners . . . and there will be losers (there always are).  The key is to recognize this trend now and ride it for all it’s worth.

Knowing where to invest can be a challenge.  You might not have the time to research and study hundreds of small companies.  The easy way to invest in this trend is through managed funds.  There’s a number of mutual funds focusing on the green theme and alternative energy.  But as always, I like ETF’s when they’re available.

Barclays recently introduced the iShares S&P Global Clean Energy Index Fund (ICLN).  It’s a focused ETF holding 30 of the largest alternative energy companies from around the globe.  It holds companies from 9 different countries.  It’s a quick and easy way to get exposure to the next big driver in the markets.

Go green now.  Before long you’ll be filling your wallet with another kind of green.


Commodity Watch 

• Soybeans (below $13 per bushel)

The commodities complex has been in a downtrend for the last few weeks.  Soybeans in particular have dropped from a high of $16.50 in July.  The last remnants of Hurricane Gustav should bring rainfall to the Midwest.  Great news for farmers as crops will benefit.  Bad news for speculators as the price of soybeans should continue falling.


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Issue Date:
 Wednesday, September 3, 2008


Notable Highs and Lows

 Church & Dwight (CHD) hit a new 52-week high of just under $64.  The company has a strong stable of major consumer products.  It's market cap is just over $4 billion.

 Myriad Genetics (MYGN) traded at a new 52-week high of just over $68. The biotechnology company now has a market cap just over $3 billion.

•  KEPCO (KEP) hit a new 52-week low of just over $13.  The Korean electric utility recently appointed a new CEO.  It also announced plans to expand its solar power capabilities.  KEP's market cap is just over $17 billion.


Quote of the Day

"I have a cardinal rule: Never fight the tape!"

                       -
Martin Zweig

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