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.
• 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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