Our First New Pick: Xcel Energy

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

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

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

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?

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

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

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