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How the Government Can Screw Your Investment

Clean energy in the U.S. is very much dependant on government incentives.

I can guarantee that many companies would avoid installing solar panels if it werent for various state and federal incentives. So you might think it’s a bit strange that the government let some of those inventives expire.

And the expiration of those incentives has done quite a number on the clean energy sector. You have solar companies unable to recover some of their previous highs and a bunch of other ‘green’ companies having a hard time.

Right now there’s a bill that should reinstate many of these incentives. And once that bill gets passed it will eliminate a big restriction on ‘green’ companies. I expect to go long shortly after I see that.

At this point i’ve checked out tons of solar companies and picked out my favorites. I’ve also been looking at wind and geothermal producers. All of these sectors will see shocking growth for the next five to ten years.

Peeling away from the green, i’ve been looking at some deep sea oil rig companies. One of them is getting recommended to our Global Profits Hotline crew. Another will be recommended in Andrew Gordons paid service, The Wealth Advantage. Needless to say, this sector is on fire. And it’s stupid cheap too.

With that said, i’m back to researching. See you all later!

Three things about Green Investments

After one of our readers, Jonathan, gave me a fantastic resource on ‘green’ investments, I started looking at the companies.

A few things i’ve noticed are…

1. Solar power is on a bull run of epic proportions. I mean, seriously.

2. Ethanol and biodiesel producers are being burried, alive, kicking and screaming due to higher input prices (corn, soy,etc…)

3. There are way too many clean energy companies that aren’t on the U.S. exchange. That’s ridiculous. Come to America, you corporate freaks!

I’m going to continue going through these companies. And i’ll soon come back with more observations and opportunities.

Till then,

Charles

Another Clue…

What’s the biggest stumbling block for the mass adoption for solar energy? Cost.

If you installed solar panels in your home – even after government incentives (which continue to grow) – it would take you around five to ten years before you break even on your investment.

Well, one company is looking to change that. The start up by the name of Sunrgi says that they can make solar power that is just as cheap as coal!

That’s five cents per kilowatt hour, not the twenty to thirty cents it currently costs.

How do they do it? They use mirrors to focus the light into a very small, highly efficient solar panel. Because there is so much sunlight hitting this small panel, it converts very well.

And since it uses only small amounts of the poly silicon needed to make these panels, it costs them less to produce (if you didn’t know, poly silicon is in high demand and there isn’t enough of it. Prices have been skyrocketing and that’s been hurting margins for solar producers).

Finally, with so much sunlight being concentrated into one area, temperatures could break 3,000 Fahrenheit. That’s why the company has built in coolers to keep the panels cool (and help them last longer than normal panels).

The company plans on being in production within 12-15 months.

Whether this actually happens is another story altogether.

So do you see the bubble I’m talking about? Jonathan already guessed it – that freakin genius. And if you haven’t already, then it’s time for me to tell you what it is…

It’s this whole green movement.

I can’t go one freaking day without seeing a commercial about how a company (which spews tons of harmful chemicals into the air) is somehow going green because they planted one whole tree in a land of no water.

IBM is going green. Google is. Chrysler says they are (with the worst gas mileage in the universe) Ford and GM say they are too.

Let’s not forget about Toyota, Exxon Mobil, GE, and every other major corporation out there.

I don’t want this to be a rant about how stupid these companies really think people are (do you believe they are that much greener). But at the least they’re making the attempt.

And as they make the attempt, thousands of blogs and websites are going online focusing on green technology, organic eating, and social responsibility.

And to think, this is only the beginning of this whole movement.

Once a democrat becomes the president – green will boom even more!

So, I’m going to start focusing more on green technology. Being that I believe the future bubble is here, it would be smart to start getting more involved in the field.

We all have lots of money to make in the next five years. And this is the start of that. I hope you can join me for the ride : )

Take care.

Buildings of the Future…

I’ve been talking bubble lately, I know.

So here’s another hint…

In Atlanta there’s this tower being built called the Aquarius tower. Want to know why I care about this horoscopic tower? Because it’s going to feature…

- A five story wind tunnel with 60 turbines
- Rooftop solar panels
- Heavy use of recycled materials
- Thermally-efficient products
- State of the art robotic valet system which automatically stores and retrieves cars, saving on CO2 emissions.

This building will cost about $70 million, will have condos and businesses inside, and be completed around late 2010.

Think about this hint for a little bit and don’t worry… I’ll give you another one soon.

: )

The Next Bubble

I have to thank everyone for their comments. I actually received more than I expected.

So before I go into what I think the bubble is, let me talk first about what isn’t the bubble.

And first on that list is oil. Sure, oil prices have been shooting far higher. And I have to admit, they have further to go. But what has government done to make it easier for oil companies to do business? Not much.

And in fact, if a democrat is elected, you might see a windfall profits tax hit oil companies. Furthermore, oil companies know that dinosaur fuel isn’t the fuel of the future.

Lastly, oil would never cause a massive cultural phenomenon like housing and the internet did.

So while I think oil prices are heading higher long-term, I think they’re doing that based on fundamentals, not a bubble.

Another big one posted here was Nuclear. While Nuclear plants are being built, the U.S. hasn’t done much in making it a lot easier to make a power plant, permit it, etc… Sure, one bill passed, but it wasn’t nearly enough.

Lastly, can you see nuclear ever becoming a cultural phenomenon like the internet and real estate were? I don’t. Too many people hate nuclear to love it.

So what is the next big bubble? I’ll be back to tell you. But here’s a hint: a lot of people were very close to calling it in the comments on the previous post.

Another charge for 13,000

That’s what it seems like the Dow wants to do.

Whether it will actually break through is another question altogether. Normally, I wouldn’t bet on a breakthrough. But the market is acting dumb enough to actually make a breakthrough semi-possible.

Regardless of how I feel about that, I feel that the Dow will NOT break past 14,000 anytime soon. Probably not until next year or the year after.

A few days ago I talked about how there was another bubble in the works. I said I’d give you more information in a few days. So here’s a hint…

The internet bubble was possible thanks to government legislation (no taxes, etc) that helped it along. The internet bubble could also create wealth out of thin air. And it drove a cultural revolution.

The housing bubble was possible, again, thanks to government legislation (no-doc and interest only loans). The housing bubble was fueled by the thought that home prices couldn’t drop. It started a whole cultural phenomenon (HG TV).

So what’s the next industry that is receiving some pretty nice government legislation, could go on for YEARS, and is starting a cultural phenomenon?

I’ll let you think about that for the next few days. But do me a favor – if you think you’ve got the answer, comment below!

Toyota’s so sweet!

Today I heard some news that made me giddy.

This is what I read at Scottrade…

Toyota today announced a contribution of more than $1 million dollars and five vehicles to Everglades National Park to support environmental education programs. The donation will benefit more than 10,000 students annually via a number of initiatives including day program field trips and camping trips for grade school students; the K-12 Miccosukee Indian School program; in-park teacher workshops for day and camping programs; in-park special programs for other school groups and student organizations; and in-school teacher workshops.

Go Toyota for rockin it at the Everglades! God knows we need all the money we can get down there to keep the sanctuary thriving!

Here’s What Yahoo Bulls Must Feel Like…

That whole Microsoft / Yahoo deal was so half-baked anyways. And to think Microsoft actually offered to give Yahoo MORE MONEY! HAHAHAHAHAHAHHAHAHA.

Makes me think twice about Microsoft management, that’s for sure. This would have been the dumbest buy of the century.

And to think, people were buying up Yahoo because they thought Microsoft would make some type of amazing, take-all-my-money offer.

Those Yahoo lovin bullish Fools!

They Keep the Party Moving…

Those bears I mean – not the bulls.

Which seems a bit funny to me. The party was all ready to go. Champagne was uncorked (an expansion in services!) and the favors were everywhere (Greenspan and Buffet both feeling better than bad about the economy), yet the bulls were nowhere to be found.

With an empty party, who do you think came to drink the champagne and party? The bears did. And they didn’t hesitate, taking the market down 100 points. And the market hasn’t been able to recover that very easily.

What do I think about it? Well, I went in and crashed the party. I didn’t care who was throwing it, i’d put on a costume and walk in, grunting in bear like manners if need be.

Made some money on my positions, although i’m not celebrating a damn thing.

It’s not like half a percent is anything amazing. Quite frankly it sickens me. But let’s see…

The Dow broke through it’s downward trend line. Although i’m wary of any big gains because the market’s overbought. Then again, it was overbought throughout most of 2007 too. So whatever.

Then there’s the vix which has been moving lower and lower. It seems to me like this market is trying to setup another rally to 14,000 (crazy, right?). But the market would be hard pressed to break 14,000 on the back of a crap economy.

Regardless, profits sometimes come from both bulls and bears. So the key is to always stay open to receiving them from either the bull or the bear.

Oh, and has anyone seen the dollar lately? Broke 73 finally! Although I still think it’ll have some resistance at its 100-day. Waiting until we hit oversold levels and i may end up being a buyer.

Mainstream Media is SO Late on This

So a few weeks ago I wrote an article bashing the McCain gas-tax holiday plan.

My conclusion was that the gas-tax did absolutely nothing to fix the reason that gas prices are higher. And in the end, all it would do is spur more demand for gasoline, meaning prices would go even higher.

And lastly I talked about how the only thing you’d have extra money for are the higher food prices you’ll have to pay.

Well, now the mainstream media is catching on, albeit a few weeks late. Today I saw this Bloomberg article.

Let me take an excerpt, because it looks like these people are reading IDE everyday.

Economists have a different take: They say the oil companies may end up the biggest beneficiaries, while the aid to families wouldn’t be enough to buy a $35 backpack.

The trouble with the plan, they say, is that oil prices are rising because of low supplies, and companies will continue to charge the average $3.60 a gallon and just pocket the money that would have gone to federal taxes.

“That’s $10 billion, and it’s going into the pockets of oil refiners,” said Leonard Burman of the Tax Policy Center in Washington. “The last time I checked, they didn’t need it.”

As it appears now Clinton is joining the gas-tax holiday bandwagon. She thinks that this tax somehow takes excess profits away from oil companies. Um, last time I checke a tax holiday takes money away from government. After all, they’re the ones taxing!

And then McCain thinks this holiday will somehow give parents the money they’ll need to go back to school shopping. What does he think, that parents fill up their tank twice a day? This money won’t be anough for a damn thing!

Oh well, asking the government to be logical is like asking a kid to not eat chocolate.

Today the market looks like it wants to push much higher. The Fed announce an expansion of their term auction facility (now they’re loaning $75 billion instead of $50 billion) and unemployment numbers came in less than expected.

Makes me happy that I got into three recent long positions and they’re all doing well. In fact, the one I bought in my personal account rallied nearly four percent from my buy point!

Hopefully today ends on an up note.