Green Investments

Our First New Pick: Xcel Energy

noreply@blogger.com (The Researcher) — Fri, 17 Apr 2009 03:10:00 +0000

Well, Green Investments readers... my fellow long-suffering, patient friends...

It's finally time.

We are ready to unveil our first NEW pick to kick off the Green Investments recovery portfolio.

Yes, we believe the bottom is in for the stock market. We could be wrong.

We have been wrong before.

And let me be clear: We are not market timers.

But I have been waiting for the right window to restart our portfolio.

And I've been searching high and low for the right company to get us started.

As you probably know, I am pretty big on green infrastructure plays. These would be companies poised to make a killing on the transformation of our energy and transportation infrastructure... our waste treatment systems... and the like.

Today we have identified a tremendous company that's already beginning to create the coming Smart Grid in states like Colorado.

That company: Xcel Energy (XEL).

Right now, this innovative company is developing something it calls SmartGridCity. This internet-based infrastructure project is allowing 10,000 citizens of Boulder (a great city, where my Buddhist buddy Karl lives) to control their electrical usage via computer.

In other words, if they want to let their clothes dryer run only when wind power is most abundant, they can make it so using their home computers, by tapping into SmartGridCity.

This Xcel project in Boulder is, in fact, the biggest and most comprehensive Smart Grid project of its kind in America. Considering the billions Obama has flowing toward Smart Grid already, we're confident that this leg-up on the competition will put Xcel in position to pocket a good deal of the coming profits going forward.

I'll have a more detailed analysis of Xcel in an upcoming Green Investments. For now, let's take some action:

Action to Take: Add Xcel Energy (XEL) to the portfolio at $18.34. Use at 35% trailing stop to protect your principal and your profits.

Good investing,

James

Shameless Pitch for Social Picks.com

noreply@blogger.com (The Researcher) — Wed, 25 Mar 2009 15:06:00 +0000

Guys, every once in awhile I come across a really cool blog that I like to lavish some love upon.

Today, the recipient of my affection is a site I recently discovered called www.socialpicks.com.

The reason I like this one is that it's a little different. This site is creating a kind of online green investment community where you can get a username... and then play with portfolios, enter into conversations and of course learn how to make money investing in a socially responsible way.

In some way it's a portal to investing blogs and vids, which is fun in itself. But Tom Konrad, the site's owner, goes a few steps further. It would be nice if the content were focused solely on green and sri, but hey... it's still a powerful tool for researching great opportunities that are out there.

Definitely urge you to check it out.

Jay

Why Our First Pick Will Be Wind Power

noreply@blogger.com (The Researcher) — Wed, 18 Mar 2009 03:37:00 +0000

I sense we're on the verge of a mini-rally... a bear-market rally... a dead-cat bounce... a sucker's rally...

Call it what you will, but I think we'll soon see energy prices steadily climbing again.

In fact, oil's already entering a pronounced uptrend, and now we have two weeks back-to-back where it looks like the markets are doing their best "I'm not dead yet" impression... a la pick your favorite horror movie from the 80s.

So where is the best place for Green Investments to go a-huntin' in the energy sector? You have "clean coal"... you have ethanol... you have geothermal... you have solar... But for many reason, I think wind is going to be the first sector to really take flight.

Why? People can understand it, for one thing, and it's relatively cheap compared to solar. We've had windmills around for centuries, driving everything from, well, grain mills to water pumps. There's something kinda charming about windmills. Although they're quickly becoming serious business.

Along those lines, I've been looking at several companies. And one of my favorites is a company called American Superconductor (AMSC).

This outfit doesn't make windmills. It makes the electricity-conducting parts that go inside them. And what's more, this company, with a $750 million market cap, provides the hardware that connects wind farms to the power grid.

But while it might be a good idea to pick up a few shares of this before it really takes off, we're not buying. Not yet, anyway.

Why? The fundamentals. Pure and simple. While the company posted its first annual gain in earnings last year, that was offset by significant operating losses for 2008. Of course, I'm confident that this is just part of the takeoff phase for the company, considering that its gross profits are climbing steadily... even if it's still losing money to the tune of $25.4 million last year.

Still, we'll keep an eye on American Superconductor. And I'll keep you posted as my research continues. Soon, I hope, we'll find the perfect wind power play for the Green Investments portfolio relaunch 2009.

Good day,

James

Global Warming - the $750 Billion Prize

noreply@blogger.com (The Researcher) — Mon, 16 Mar 2009 17:28:00 +0000

A very worthwhile new article in the International Herald Trib details the current state of green investing in Europe - and to some degree, globally.

http://www.iht.com/articles/2008/03/28/yourmoney/mgreen.php

It's not surprising that wind-power is cited as one of the most resilient subsectors of the green space.

And it reminded me of, well, how profitable it's going to be for businesses that will spearhead the fight to contain global warming.

The article points out that an estimated $750 billion will be made between now and 2016. That's more than $100 billion a year for the next seven years.

And considering that huge chunks of that will go to some very small startup firms, in some cases, the gains for investors could be sizable.

There will be a ton of flame-outs along the way. Just as with any truly revolutionary, game-changing transformation (like the Internet revolution)... there will probably be a lot more losers than winners.

But identifying those winners is exactly what we're about. And to that end, I plan on having our first recommendation posted later this week.

Especially if the markets can maintain some stability.

Good investing,

James

Green Investments... a Big Bubble?

noreply@blogger.com (The Researcher) — Wed, 11 Mar 2009 14:50:00 +0000

A recent debate has broken out between two colleagues and friends of mine over green investments...

Both of these guys - Dave Fessler and Louis Basenese - are brilliant analysts and both share different opinions about the long-term viability of green investments... and the green changeover in the economy.

They write for Investment U.

Of course, I side with Dave Fessler on this one. He cites many reasons why Green isn't a bubble or a fad but the only realistic long-term solution for the world's energy needs.

But if you want to read two really smart investment minds taking different sides of the green debate and holding their own, check this out:

http://www.investmentu.com/IUEL/2009/March/alternative-energy.html#more-6249

James

Obama Cap-and-Trade Plan Has a Twist

noreply@blogger.com (The Researcher) — Wed, 11 Mar 2009 13:41:00 +0000

Most greenfolk have some knowledge of cap-and-trade, I would suppose.

That's where government's put a cap on how much carbon-based pollution can be produced by a particular kind of company... and if a company exceeds their limit, they must pay for the right by purchasing carbon credits from companies producing less than their limit.

The problem with this plan - one of the potential pitfalls - is that it could raise prices for consumers over the long haul on certain products. Obama's budget has an ingenious solution: the excess carbon credits and the revenue they would generate would be given back to the American public in the form of tax refunds.

In some cases, people would receive more in refunds than they paid in increased costs, meaning you might pocket a little money on this (ironically, who wants to profit from excess carbon pollution?).

Anyway, great article on this in BusinessWeek:

http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090310_825431.htm

Good day,

James

Obama Speech and Green Investments

noreply@blogger.com (The Researcher) — Wed, 25 Feb 2009 18:51:00 +0000

Last night, Obama made another marvelous speech to Congress. And he used the opportunity to drive home his priorities for renewing the U.S. economy.

At the very top of the list: renewable energy.

This is more than symbolic. Obama is, unlike so many congressmen who pay lip service to sustainable energy, actually driving resources there to the tune of more than $107 billion.

What's more, he's talking about a cap-and-trade scheme here in America that would be somewhat modeled, presumably, on similar programs being conducted under the Kyoto Protocols.

To that end, he's pledging $15 billion a year toward sustainable energy projects. Here's part of what he said last night:

"The budget I submit will invest in the three areas that are absolutely critical to our economic future: energy, health care, and education.

It begins with energy... Thanks to our recovery plan, we will double this nation’s supply of renewable energy in the next three years. We have also made the largest investment in basic research funding in American history — an investment that will spur not only new discoveries in energy, but breakthroughs in medicine, science, and technology.

"We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country. And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.

"But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America."

Obama is not a tippy-toe kind of guy, that's for sure.

He doesn't seem interested in bartering piecemeal with the opposition for a concession here and there. He's defining the playing field, and his vision does not feature an option whereby the same old policies and talking will suffice.

He seems bent on revolutionizing our infrastructure for real - which is every bit as ambitious as Kennedy's pledge to land on the moon... but a whole lot more practical and necessary.

It will also, in our opinion, prove to be a lot more profitable. And that's exactly where we plan to strike first, when our new recommendation comes your way within the next week or so.

Good day,

James

Obama's Green Investment Push Gains Global Support

noreply@blogger.com (The Researcher) — Wed, 25 Feb 2009 05:12:00 +0000

In a recent post we talked about the Obama administration's plan to inject $100 billion-plus into the green energy sector here in the U.S.

But we failed to mention that he's not alone in the world.

Governments in Asia and Europe are shifting their infrastructure focus toward greener, more efficient technology too.

In fact, these three regions - the U.S., Europe and Asia - have now committed more than $200 billion to funding green energy initiatives, according to a new report by Deutsche-Bank.

As Reuters reported, DB's head of climate change investment research Mark Fulton sees this trend as bullish for green energy companies in general:

"The activity shows that governments are very serious about continuing to tackle issues around renewable energy and climate change," he said during a teleconference just as DB released its latest analysis yesterday.

"We believe this trend ... will provide crucial support to climate change industries during the current global economic downturn, helping to offset the impact of weaker debt markets over time."

European Union nations have already committed some $60 billion to green energy and infrustructure companies. And these are exactly the areas where we'll be looking to build some of our core portfolio in the coming days.

In fact, we may start with a California company that's already tied into that state's smart-grid project pipeline.

The shares have taken a beating over the past year, as you can imagine. But it's in the sweet spot right now, and possible poised for a rally on the back of Cali's green infrastructure buildout.

That company is called SunPower Corporation. Here's the info from Yahoo! Finanace:

http://finance.yahoo.com/q?s=SPWRA

We're not officially recommending the company yet, but it's on our watch list.

I'm thinking this time around, we're going to start putting together some kind of strategic portfolio, complete with some asset allocation, to ride out this economic storm.

More to come,

James

Warren Buffett's Green China Play

noreply@blogger.com (The Researcher) — Tue, 24 Feb 2009 21:56:00 +0000

According to a report featured in the excellent blog Ecostocks.com (http://www.emailwire.com/release/19947-Warren-Buffett-Invests-into-Electric-Car-Manufacturer.html), Warren Buffett just pumped about $230 million into a Chinese car-battery company listed on the Hong Kong Stock Exchange.

The company, BYD Company Limited, also trades over the counter (OTC: BYDDF) so you may be able to buy it through your broker. Volume here is pretty light, at about 15,000 shares a day, although with a $1 billion-plus market capitalization, this is no nanocap.

Buffett's Mid-American Energy Holdings Company plans to buy 225 million shares (no word as to the price, although the stock is trading around $1.90 on the bulletin board).

MarketWatch has a good story on this, too:

http://www.marketwatch.com/news/story/berkshire-powers-electric-cars-buy/story.aspx?guid=%7BA0737406%2D0BEC%2D4527%2D84CB%2D8EEA08BD1792%7D

The company makes high-tech lithium-ion batteries and other technologies with the main application being electric cars. Being in the Chinese market (the fastest-expanding auto market in the world) could be what gives this company the edge over its U.S.-based competitors.

We'll put BYDDF on our watch list. But I would not recommend jumping into the OTC shares. Yes, they might triple in value over the next six months. But they might go to zero, too. If anything, we'd recommend the Honk Kong shares, which you should be able to buy through your broker as well.

Good day,

James

Obama's Green Economy - The $100 Billion Prize

noreply@blogger.com (The Researcher) — Tue, 24 Feb 2009 05:42:00 +0000

There's something about a crisis that forces people to reexamine things, drop old prejudices and finally seek new solutions.

Because, frankly, the old solutions just don't work the way they used to.

That's certainly the case with the current economic crisis and the promise of green investing to help lead the world into a new era of sustainable economic growth.

Green is going mainstream, and there's a heightened sense of urgency. Obama's new $800 billion (give or take) stimulus program has alotted at least $100 billion toward green energy grids... solar and wind power... clean coal and other technologies. That's 1/8th of the package - an absolute knock-out percentage by any stretch.

Clearly, Obama's putting his money where his mouth was on the campaign trail, and that's a good thing.

I would love nothing more than to see mainstream investment minds, writers, bloggers and journalists actively embracing green as a result... rather than playing with it like a cat plays with a mouse, waiting for it to die some inevitable death. As if green were a fad. As if it were the Chia pet of investing.

In fact, since the money is going to flow there, it seems the mainstream is adjusting to the new reality, and starting to - gasp - embrace it!

Bloomberg's John Wasik wrote in anticipation of the stimulous going through:

If Congress is serious about battling climate change, it will mean putting more than 10 million cleaner and carbon-neutral vehicles on the road and retrofitting buildings, factories, offices and homes.

Green buildings not only save energy and reduce carbon emissions, but can create employment. In Germany, just insulating 200,000 apartments led to 25,000 new jobs.

As infrastructure and transportation are rebuilt and "greened," it will demand more new steel, concrete, plastics, electronics, clean power and earthmoving vehicles.

Corporate Earnings

Another benefit may turn up in your personal portfolio. A green economy lifts almost every industry as bottom lines improve because less energy and resources are consumed. Communities from Silicon Valley to the Mahoning Valley can all prosper from this boom. Companies such as General Electric Co., Duke Energy Corp., Caterpillar Inc., Siemens AG and Hitachi Ltd. will benefit from big infrastructure and energy spending.

Yes, Big John. Welcome to the green side.

http://www.bloomberg.com/apps/news?pid=20601039&sid=a2kXgRVOCh6c&refer=home

Of course, our argument here all along is that green = efficiency. How in the world could any self-respecting capitalist not love the idea of increasing efficiency to promote long-term economic growth... while creating millions of new jobs now?

More to come.

James

We're diving back into the markets... but why?

noreply@blogger.com (The Researcher) — Tue, 24 Feb 2009 05:11:00 +0000

Well, it's been over a year since we concluded our 12-month experiment.

And the results were conclusive: You can indeed beat the S&P 500 with only green investments. I'll be providing detailed data from that experiment in an upcoming post.

Meanwhile, with the world apparently falling apart at the seems, it's time to dive back into the markets... but with a few caveats.

You can call them my rules of green investing in the New Obama Era:

1) BE PREPARED TO LOSE SOME: Only use money you can afford to lose when investing in new stock speculations.

2) DISCOVER THE GOVERNMENT ANGLE: Follow the money. And the money is coming from Congress right now. Invest only after answering this question: How might the government's spending policies affect (or not affect) any potential investment in the green space. Pay very close attention to the New Economy (or the new "O-conomy" as my friend Larry calls it). It's being constructed largely without influence from Wall Street, and with heavy government direction. And it could be very beneficial to green technologies and the green culture in general.

3) PROTECT YOUR DOWNSIDE SYSTEMATICALLY: As we construct our new core portfolio, we'll be looking to an investment horizon of at least one year, although we'll use our regular trailing stops to protect our gains and minimize our losses along the way.

The last year has been amazingly damaging to portfolios around the world. I've watched it up close and personal from inside the financial industry, and it has been uglier than anything I've seen in this lifetime.

In fact, I haven't met a single old-timer who has been able to say: ah, this is nothing. Back in so-and-so we had to... etc. Nope. Even they old guys are stunned and humbled.

Humility, however, is the beginning of all investment success, as my friend and colleague Alexander Green of the Oxford Club has written.

So with a dose of humility, we're about to start putting together a new green portfolio right in the midst of the most horrible markets we've ever seen. Because guess what - when the recovery comes, and the New Economic landscape becomes more clear, I am confident that green technologies will be more prominent - and profitable - than ever.

More to come,

James

A Very Special Green Investments

noreply@blogger.com (The Researcher) — Mon, 24 Dec 2007 23:34:00 +0000

Well, here we are... one day before Christmas. Oh yes, they call this Christmas Eve.

After today's short session, we can officially call it one year since I began writing this blog. We've had our ups (big winners on Bunge options, riding the LDK Solar explosion to 90%-plus gains in a matter of weeks)...

And we've had out downs (just about every penny or OTC stock we've added to the portfolio).

Along the way, we've stuck to our guns on the trailing stop. And sometimes, as with Starbucks, we've done it just KNOWING the stock was about to rebound. But that's emotion talking... that little twinge I feel seeing that SBUX has rallied over 3% since we sold? That's not logic - that's pure blood-boiling, bug-eyed madman talking there...

And that's the kind of nonesense that most certainly will get you creamed in the markets fast. So we sell, we take out 25% lump on the coconut... and we move on.

Now... here's the thing...

Soon we will tally up how our portfolio has done versus the S&P 500 over the past 12 months. I honestly have no idea, although I am assuming we're going to come out a bit ahead when we tally all our closed positions.

When we tally our closed and open positions, it'll get a bit more dicey, but I'm still confident we'll be okay especially with the strong rally in PZD and even Rio Tinto the last few sessions.

My point is, let's see where we are after tomorrow. Meanwhile, love and blessings be on you and yours. We're in Rochester, New York tonight - where we should be on Christmas Eve. There is snow outside our Holiday Inn. We're heading to my Sisters for some cinnamon rolls and coffee and to catch up with family long missed.

Tonight, let's not talk anymore of stocks or profits or dollars or the economy.

Let's go have some fun... with the people that count. And if you're alone - well, would you mind tallying up how we've done this year? Just kidding.

Merry merry,

James

SBUX Hits Our TS - SELL

noreply@blogger.com (The Researcher) — Thu, 20 Dec 2007 16:44:00 +0000

Mark it...

SBUX... Dead... Stopped out at 20.03 at 4:30 p.m. on December 19, 2007.

We're selling SBUX from the portfolio today for a 25% loss.

James

Starbucks Could Stop Out

noreply@blogger.com (The Researcher) — Wed, 19 Dec 2007 15:21:00 +0000

Starbucks (SBUX) is trading at 20.23 as I write. If it closes below 20.24 today, we'll sell on the open tomorrow.

Starbucks has been starcrossed for an entire year. It has struggled with earnings and has expanded at lightning speed into China and elsewhere. Same store sales have plateaued, but all of this seems a natural part of the business cycle... like a pre-boom preparation.

Unfortunatley, we may have been very right here... but 1 year early.

Keep an eye on this position. Even if we stop out, we may re-enter at a later time.

Good day,

James

Rio Tinto Rising Again Today... Up 12%

noreply@blogger.com (The Researcher) — Mon, 10 Dec 2007 15:01:00 +0000

Our play on Rio Tinto is getting another boost today.

According to the Associated Press and a London Telegraph report, Blackstone is preparing another rival bid for Rio. This time, it could be a Chinese sovereign wealth fund doing the bidding.

"The Sinosteel bid on Midwest may have inspired another huge mining deal. Blackstone (NYSE: BX - news - people ), the U.S. investment fund giant, is reportedly in the middle of putting together a consortium that may include a Chinese sovereign wealth fund to mount a bid for Rio Tinto (nyse: RTP - news - people ), the Daily Telegraph said Monday.

"Blackstone believes Rio Tinto's iron ore operations are worth at least $110 billion, based on the valuation Sinosteel is placing on Midwest, the British newspaper reported, without citing any source.

"Speculation that Chinese companies might bid for Rio Tinto to counter BHP Billiton (nyse: BHP - news - people )'s unwelcome takeover proposal percolated vigorously until Baosteel Group last Thursday denied any plan to bid for the Anglo-Australian mining group."

Our shares are up 2.45% today on the news. And they're up about 12.4% since we added them to the Evergreen Portfolio.

Meanwhile, consolidation in the minerals and mining sector is getting white hot.

More to come,

James

KEPCO Surges on China News

noreply@blogger.com (The Researcher) — Fri, 07 Dec 2007 19:45:00 +0000

Our KEPCO position has surged 1.45% today.

The likely reason? The company's sudden move into China's power market... in a big way. Here's the story from AP:

* * * * *

"SEOUL, South Korea (AP) -- State-run Korea Electric Power Corp. said Thursday it will take a 34 percent stake in a $1.34 billion Chinese joint venture that will develop coal mines and buy and build power plants over the next five decades.

"Kepco will "acquire 15 power plants, build nine power plants and develop nine coal mines in Shanxi, China," as part of the joint venture, the state utility said.

"Other partners in the Gemeng International Energy Co. joint venture will be China's state-run Shanxi International Electricity Group with 47 percent and Deutsche Bank with 19 percent.
Gemeng received Chinese government approval for its projects in April this year.

"The 24 power plants will have a combined capacity of 9.33 million kilowatts and the nine coal mines are expected to produce 60 million metric tons of coal a year."

* * * * *

I'll be watching this story closely. This is really good news for shareholders, long term.

But depending on the nature of these coal plants, we might exit KEPCO. If the plants are dirty and not in line with Kyoto, we'll drop this position from our portfolio.

They might be perfectly fine, clean-coal facilities for all I know. Need to research this move further.

More to come,

James

China's Baosteel Joins the Rio Tinto Bidding Party?

noreply@blogger.com (The Researcher) — Tue, 04 Dec 2007 18:42:00 +0000

Remember our play on Rio Tinto (RTP)?

BHP Billiton made a formal offer to buy out the company for about $150 billion. That offer will not get it done, according to Xu Lejiang, head of China's massive steelmaker Baosteel.

According to the latest report in The Guardian newspaper:

"Baosteel, China's largest steelmaker, is considering a bid for Rio Tinto according to the president of the group.

"In an interview with a Chinese business newspaper, Xu Lejiang said his company was considering a bid for the mining giant, which has recently rejected a three-for-one share proposal from BHP Billiton, its larger rival.

"He was quoted as saying: "We are considering the matter now. The possibility of a bid is very big. The purchase plan is still at the stage of research and negotiation. We haven't signed any agreement yet."

"He added that a $200bn (£97bn) price tag would not be enough. BHP's current proposal values Rio Tinto at around $150bn."

http://www.guardian.co.uk/business/2007/dec/04/riotinto.china

We said in this space that BHP might have to counter with a $200 billion-plus offer. Now Baosteel is confirming that it could take MORE than that to buy out Rio. Meaning our shares could soar with the next offer, if there is one.

Good day,

James

Stupid Prediction Update: Crude Oil Sinks

noreply@blogger.com (The Researcher) — Tue, 04 Dec 2007 15:17:00 +0000

Not long ago, we predicted that crude oil would correct sharply.

It appears the correction has begun:

Oil prices have dropped about $10 in one week on the belief that OPEC has all but decided to boost production. But the price drop itself has raised questions about whether the oil ministers will follow through during Wednesday's meeting in Abu Dhabi.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20071204&id=4160093

I'm guessing there's a lot more correction to come.

So would cheaper oil mean lower demand for alternative energy plays like our Green Energy Resources?

Not necessarily. As long as oil's trading above $50 a barrel, oil's still considered expensive in terms of the industry and its exploration costs.

James

Green Energy Resources Jumps 33%

noreply@blogger.com (The Researcher) — Mon, 03 Dec 2007 19:58:00 +0000

Love those pink sheet stocks, huh?

Today our play on Green Energy Resources (GRGR.PK) is up 33%... in one session. Who needs options?

Anyway, here's what's going on...

Great Britain's energy secretary just announced the construction of the largest wood-biomass power plant in the world. Here are the details...

"Great Britain's Energy Secretary John Hutton approved the largest wood-based biomass plant in the world last week. The 350 megawatt plant will be operating 24/7, 365 days per year on wood energy power. The Secretrary noted, "The wood biomass will be supplied from the United States.

"Green Energy Resources is the only current US exporter of wood biomass energy that can meet present import and environmental standards in the United Kingdom and Europe."

Considering that GRGR recently opened a satellite office in London and is pushing aggressively into the European market for wood biomass, this could be a very good omen indeed...

I must say, however, that the company's press releases are sometimes as obtuse and hard to read as tealeaves. Nevertheless...

Good trading,

James

Our Rio Tinto Shares Jump 10%... Could Could Rio Tinto See a 60% Jump?

noreply@blogger.com (The Researcher) — Sat, 01 Dec 2007 16:30:00 +0000

The beautiful courtship of Rio Tinto is in full swing... And if BHP Billiton Chief Marius Kloppers has his way, this will end in the biggest merger in this history of the commodity industry.

Since we added Rio to the Green Investments portfolio last week, the stock has rallied nearly 10%.

That's an enormous short-term jump for a global resources behemoth - especially one with a $150 billion market cap.

Two things are going on here.

One, in a bid to keep shareholders from going for the offer too easily, Rio CEO Tom Albanese is flaunting his companies strong numbers, and profitability. He's also talking about increasing dividends. All of this has the effect of raising the company's perceived value on the world stage, which is good for our shares.

Two, that doens't mean a deal won't go through...

The good news is that many analysts don't see this as a bid to stop a merger at all costs. But rather, this could be the beginnings of the negotiation process. Even through Kloppers and Albanese have not begun talking officially, they have begun the mating dance in the public square.

Already Rio shares are trading at a 10% premium over the offer from BHP. That signals that investors think a sweeter offer is on the way from Kloppers and Company.

In fact, one analyst believes BHP will have to offer a 60% premium to lock up this history-making deal.

We're far, far from ANYTHING happening here, let along an offer that sweet... and that Albanese and his shareholders find acceptable.

Could BHP Offer $200-Plus Billion?

But it's possible that Rio would benefit greatly from either scenario: a merger could make the shares worth 60% more for us... That would require an all-share offer from BHP at levels exceeding $200 billion.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1eJh6OkTGR4&refer=home

On the other hand, a non-merger would bring every positive aspect of the company sharply into public focus, making their perceived value higher and possibly driving shares upward that way.

Stick around. This is going to be an interesting story to watch... And possibly profitable for us green investors.

Good day,

James

Add Rio Tinto to the Green Investments Portfolio

noreply@blogger.com (The Researcher) — Wed, 28 Nov 2007 13:48:00 +0000

Today we're adding one of the world's largest resources company to our Green Investments portfolio. It's also a member of the Dow Jones Sustainability Index of companies. You'll find the full list of DJSI stocks at the bottom of Green Investments (just scroll down).

I'm talking about Rio Tinto (NYSE: RTP).

Not only is this company in the perfect position to take advantage of the global boom in commodities, it's well run, highly competitive and something of a hedge against a worldwide equity slowdown... simply because it deals in commodities and currencies.

And because it is a classic "flight to safety" stock in some ways, having a market cap exceeding $137 billion dollars.

But here's the kicker...

The "Surprise Bid" that Could Send Rio Soaring

Right now, BHP Billiton - another global goliath of commodities and resources - is trying very aggressively to buy Rio Tinto. The terms of the deal are very reasonable, according to my sources.

And if this deal goes through, it would be one of the largest mergers in the history of the commodity business... and likely provide a nice pop in Rio Tinto shares.

Action: Buy Rio Tinto (NYSE: RTP) at $426.75 or better. We'll use a 25% trailing stop on this position.

Good day,

James

Green Energy Soars 30.7% in One Session

noreply@blogger.com (The Researcher) — Sat, 24 Nov 2007 02:00:00 +0000

Dear hearts,

Today Green Energy Resources rallied 30.7%. This is one of our Green Investments that, for some reason, has dogged since we added it to the portfolio. Despite tremendous news on all fronts, this stock has suffered with the volatile markets.

But today was good news.

Frankly, we still believe this stock has tons of upside. It's scoring contracts that are well beyond its entire market cap (admittedly, a small number). And it's riding two very powerful and converging trends: commodities and cleantech.

There will be more to come on this front. If only the markets could get themselves in order for a whole week, we might see some of our positions rally before the Dec.25 date that is both Christmas... and the 1-year anniversary of this blog's birth.

Thanks for sticking with us... and reading Green Investments.

Please feel free to send comments, ideas, gripes, philosophical observations and vague proclamations to this blog and join the fun.

Happy holidays,

James

India Cleantech... A HUGE Opportunity for Investors

noreply@blogger.com (The Researcher) — Thu, 22 Nov 2007 14:02:00 +0000

Lately my research has taken me to India...

Land of the 9% GDP growth rate...

Land of the billion English speakers...

Land of the well-educated workforce...

Land of the lagging infrastructure.

Here's where it gets very, very interesting for green investments and those who tend toward them.

India's infrastructure is massively underdeveloped. I'm talking about roads, bridges, electricity, communications, ports and buildings.

However, the country is undertaking a massive infrastructure buildout that - with the help of hundreds of billions from the government - is striving to address the infrastructure shortfall.

Two Forces Combining... for Big Gains: Cleantech and India

Bottom line: India can choose to build out its energy and building infrastructure any way it pleases. Of course, in an energy-starved nation, efficiency is absolutely paramount, much moreso than it is, say, here in the U.S.

Where my neighbor trims his rose bushes with what looks like a small, gas-powered 2-seater airplane.

Of course, that means that India will incorporate the very latest in energy efficient technologies (cleantech) into its infrastructure buildout.

http://www.ecoworld.com/home/articles2.cfm?tid=416

The big opportunity here for investors is in India's cleantech future. Right now I'm researching a company that could be perfectly poised to take advantage of this long-term boom... not only in cleantech but in India itself.

Indian Cleantech... Two Ways to Play It?

It's called Conergy.

If you're a greenie, you've probably heard of this alternative energy company. If not, you should check it out. This could be the ultimate India cleantech play right now. Unfortunately, the shares only trade on overseas markets at the moment, so unless an ADR is made available, we might have to delve into the international markets... or wait.

http://www.conergy.us/desktopdefault.aspx

The other possibility here is Sterlite Industries. This company is providing copper and power plants across the country and IPO'd in the U.S. just 7 months ago. I like it as a cleantech India play but need to do more research into the fundamentals here, and the specific green policies of Sterlite.

More to come, along with an official recommendation if we can find a good one.

Renewed Vow: No More OTC Stocks

NOTE: I'm renewing my vow to never recommend bulletin-board or over-the-counter stocks at Green Investments again. For some reason, Green Energy Resources and D1 Oils are both sucking wind, majorly. No bad earnings announcements... no bad management decisions. Just huge contracts, good news, dividend announcements... and sinking stock prices.

As Einstein said: Insanity is doing the same thing over and over and expecting different results. Shoulda learned my lesson on BB stocks.

Happy Turkey Day,

James

Our Crude Oil Correction Call Cometh

noreply@blogger.com (The Researcher) — Thu, 15 Nov 2007 21:37:00 +0000

A few weeks ago, I made the idiotic prediction that crude oil was about to pull back in a most violent fashion.

I think we were right, but early.

Tomorrow, some 30% of crude oil options will expire worthless... because they are owned by speculators and hedge funds betting on (or hedging against) $100 oil.

When these options expire, it will take the pressure off the crude oil markets. And a major price pullback will begin.

As the Wall Street Journal reports:

Wall Street's speculators, who contributed to oil's 49% rise since the beginning of the year, have shifted direction this week. Yesterday marked the expiration of a key deadline in the crude-oil options markets. As it became clear that oil wouldn't hit $100 a barrel by the deadline, a chain reaction of selling ensued as traders unwound bets pegged to the risk of $100 oil.

The pullback has already begun. We called it early. But then again,
you don't have to be a genius to call a massive reversal... You only have to be
patient.

And then you need the audacity to say I told you so when you are eventually right!

Not that we're doing that of course.

What Oil's Coming Correction Means for Us

What this could mean for our portfolio is some relief, as oil and stocks have traditionally moved inversely (although in recent years, this hasn't been the case). A nice winter rally would certainly help our battered portfolio.

As will our next upcoming recommendation... a cleantech firm poised to clean up in China.

More to come,

James

Green Investments Weekend Edition... GRGR's 5% pop... Rugby Return... Visiting Austrailians... And the "Boat Race"

noreply@blogger.com (The Researcher) — Sun, 11 Nov 2007 03:12:00 +0000

The good news:

Our Green Energy Resources (GRGR.PK) play bucked the Frankenmarket this week and bumped up more than 5.8% in Friday's session. Why? It's a short, sweet story.

Remember that when we recommended GRGR we talked about the company's expanding presence in the European and Chinese markets.

European regulatory schemes are playing right into this little company's hands, and Green Energy company just announced that it has secured 2 more sizable shipments to Europe.

"Nov 9, 2007 - Green Energy Resources (Other OTC:GRGR.PK - News) has landed two contracts to supply woodpellets to European power producers. The contracts total 110,000 tons through 2008 and have a total value of $19 million. Export shipments are underway. The company expects 4th qtr revenues in the $2-5 million range."

To read the full report, go here: http://biz.yahoo.com/iw/071109/0326670.html

Considering that these two contracts are more than twice Green Energy's total market capitalization, you can see the potential for growth here is great, no?

Green Energy, as you'll recall, produces wood pellets that can burn in coal-fired plants, reducing emissions, and taking advantage of the ONLY renewable energy resource that can be transported.

Keep buying...

Why We Love Australia... And Australians

Green Investments is officially long Australia. Not only does an old friend live and work there now (also in the investment business)... it's also where the America's Cup was... ahem.

Now we have another reason to love Australia. At the moment we have a house guest who is Australian. He's also one of the world's premiere rugby players (a #8). This gent is visiting with his girlfriend, a Quebecor and fellow rugger (and a cute one at that).

So we've been talking about rugby, and playing some rugby. And then tonight I learned a whole new language: Cockney rhyming slang.

Used by the criminal underground (which explains why my friend knows about this language), Cockney rhyming slang was developed to throw off the coppers. So instead of saying you've put some SPF 30 on your "face"... you say: "I already slapped some SPF 70 on muh boat race." Boat race is the Cockney ryming slang term for face.

More to come,

James