Green Investments Exclusive!!! BB to Reduce Rates by 0.25%

I just received word from my Fed source, Madame Schlotzky the clairvoyant, that Ben Bernanke will lower interest rates tomorrow by 0.25%. This is absolutely confirmed. Madame said her pet iguana, Raul, vomited up a fruit fly last night at precisely midnight, and that this usually means a quarter-point lowering is afoot... or that he requires a small thimbleful of Mylanta in order to resume his nightly slumber.

Anyhoo...

While the rest of Wall Street wonders how the Fed will move, if at all, we can already take solace in the fact that the S&P 500 is in for a very nice three-month rally in the wake of tomorrow's Fed announcement...

Further mindless predicitions...

We'll see continued volatility for another week and a half as the markets adjust to the new rate... Then a small dip... then a long, steady, two month rally starting in early October and lasting perhaps through the rest of the year.

Best,

James

One More Case for SRI

So far this year, the Vice Fund ETF (VICEX), made up of companies trafficking in booze, guns and other bad stuff, is up 6.68%. That's handily beating the S&P 500, up just under 3% for the year.

However, our Evergreen Portfolio is up more than 140% overall, and more than 24% on a share-weighted basis... including the losers.

My point is not to prove that sin stocks are bad. They can obviously be good investments.

My point is, you can beat them handily with well-chosen SRI and green investments every time.

If you have the choice, and you do, which would you rather be doing?

James

An Anti-Emotional Case for Green Investing

The primary mistake made by "sin stock" advocates -- those who emotionally push alcohol, tobacco, defense and gambling stocks as if they have an ideological axe to grind -- is that you must choose between great returns... OR keeping your soul intact.

Bullshit.

You don't have to buy Budweiser or Diageo or Lockheed Martin to make money.

You don't have to knowingly invest in companies that profit from things you don't agree with in order to beat the markets.

Personally, I don't give a fig if someone drinks or not... or if you smoke. That's a personal choice, and bravo for you if you drink three pints of scotch a night and smoke yourself to sleep.

But NOT investing in sin companies doesn't make you some kind of naive financial sissy either. That's simply nonesense -- and worse, it's an emotional argument about something where emotions are downright dangerous.

You see, I think SRI makes sense logically. The companies we focus on are at the cutting edge of energy technology, carbon neutrality, efficient use of resources and the zeitgeist itself... These companies are often, in my opinion, driven by people who possess more natural awareness of their environment and better business vision in general.

Why else would Goldman Sachs have gone green? Why is Starbucks working toward carbon neutrality within the next year?

Simply... They see the future better than "money first" businessmen do.

Chances are, if you're more aware of changes in society... more aware of your business's overall impact on its environment... more aware of emerging technologies for improving your energy efficiency... you might just be better equiped to improve your efficiency in general, or to adopt emerging technologies that give you an edge in the markets.

And of course there is the larger human point behind SRI: If the human race is to survive and thrive, we need clean water and air and food.

It also helps if we lower the incidence of diseases like liver cancer, cirrhosis, lung cancer, emphysema and, while we're at it, reduce the occurance of gun-related deaths and wars. This is a baseline survival/quality-of-life question, not an emotional hippy rant from the 1960s.

The SRI perspective is not emotional - it's almost the opposite of emotional. Granted, I feel better about my choices when I'm making them with my kid's future in mind... and especially when they soar 140% in a matter of weeks.

But from my perspective, the real "emotions" come in when you get stirred up and ideological about it, such as you so often see with "sin" advocates who can hardly contain their Limbaugh-like screaming. Human beings are basically weak and vice-oriented, they argue.

That's reality, they say. And when times get tough, buy sin stocks, because a lot of miserable people out there will be turning to cigarettes, booze... and even firearms (some turned on themselves, unfortunately) to escape the nightmare of their lives.

But hey, you'll squeeze an extra 5% from your portfolio, so it's worth it, no?

NO.

While the extreme free-market guys see SRI as some left-wing conspiracy to rob investors of their due returns, they're wrong. While they myopically see it as a perversion of "pure free market capitalism" they're wrong.

Again, it's emotion-based, ideological bullshit.

Here's a perfect example from a Minyanville writer who invokes the dusty, heady name of Adam Smith himself to argue against SRI... as if putting the frosting on his cake of an anti-SRI argument:

"Adam Smith’s invisible hand did not wear a social glove and for a good reason: social criterions only add inefficiency to the system of capitalism."

He's arguing that SRI is somehow outside the "system of capitalism." But of course it's just another force operating within the system of capitalism.

Think about it... If every American made the free choice to stop buying booze, cigs and guns... and every company producing these things in America goes belly up in 10 years... and the stocks disappear... is that not part of the efficiency of capitalism at work? SRI is really just the free market at work.

Free choice is part of capitalism. And that includes the choice to NOT invest in stuff that's harming people or the planet in an overt way. Like it or not, most SRI people aren't doing it because someone is forcing their hand.

Again, the anti-SRI guys are offering a false choice: You DON'T have to choose to be part of the capitalist system OR choose to invest responsibly.

You don't have to choose to make money... OR choose to invest responsibly.

Our evergreen portfolio is destroying the S&P 500 exponentially so far this year, returning more than 140% (including losers) versus about 4% for the broad stock market. Even on a share-weighted basis, we're more than quadrupling the S&P right now.

Perhaps that won't go on forever, but at the moment it looks like the real money is in well-chosen, and fortunate, socially responsible investments.

Best,

James

LDK up 144%... GRGR Jumps 11.1%

Stocks are off to a fast start today, and LDK Solar has climbed its traditional 3% so far this session. Since we recommended this Chinese solar play some weeks ago, it has skyrocketed off its post-IPO low and gained 144%.

Now...

Even if the stock sells off a bit in the coming weeks, this is still a good long-term play I believe. The company just broke ground on a silica-producing plant adjacent to its wafer manufacturing plant on the mainland. And that should keep raw-materials prices low going forward, while competitors scramble to find cheap silica - which is growing increasingly difficult to do.

Let's keep our trailing stop on this position right where it is... Doing so will give us a little more wiggle room should profit-taking knock the stock down before the next leg of a long runup.

* * * *

Also today, our GRGR play has rebounded back to our entry price, rising 11.1% in this morning's trading. I really like this company and believe it has long-term potential. But wouldn't put more than 1% of my portfolio into this decidedly micro-cap, and highly speculative, resources play.

Good day,

James

GRGR's Joe Murray: A CEO with Soul?

It was just reported that GRGR will issue a 10% dividend to shareholders of record as of September 30, 2007. That's great news and represents a doubling of last year's 5% dividend paid.

Perhaps even more interesting, and heartening to shareholders looking to stay in GRGR for a long-term ride: CEO Joseph Murray has vowed to put his entire dividend back into the company treasury, just like he did last year.

Like, who does this kind of thing? Are we being hypnotized by some kind of chimeric "perfect green stock" and the perfect socially responsible CEO, if there is such a thing? Is Murray going to peel away his rubber human skin to reveal a horrible, lecherous, scaly yet slimy alien KILLER underneath?

Who knows...

But it was nice that the stock rallied back up to our entry point today after being 15% in the hole at lunchtime.

* * * *

One final thing we can be sure of is that Ben Bernanke's beard is looking tremendous these days... and he won't touch interest rates.

Good day to you,

James

Move LDK Trailing Stop UP to $49.36

Well, this is an exhilerating day. Not because the markets are doing anything special, but because we have the opportunity of locking in our first triple-digit stock winner in our Evergreen Portfolio.

Of course I'm talking about LDK Solar.

Right now the stock is trading down about 3% on the day at $53. In order to ensure that we walk away from this position with at least a 101% gain, we're going to move our trailing stop on LDK Solar up to $49.36. That means we'll sell the position automatically if it closes below $49.36 at any time going forward.

Meanwhile, our newest position -- the microcap GRGR -- is down 15%. But guess what. That's nothing for a microcap to move over the course of a few trading sessions. This is a rare beast: a microcap I consider more of a long-term investment than a trade.

At any rate, congratulations to us! We've locked in our first triple-digit winner in LDK, no matter what the market brings us from here.

But to be honest, I think this Chinese solar company -- armed with a bevy of recent high-dollar contracts and plenty of momentum -- has a ways to go yet.

Good day,

James

Adding Green Energy Resources to the Portfolio

I've long been searching for the perfect green commodity play, because I think commodities still have years of boom time ahead of them (the current 16-20 year bull cycle started in 1999) and because China's still growing... and will continue growing for some time to come.

What I wasn't looking for was a micro-cap stock. But unfortunately, that's what I've found.

Luckily, this micro-cap has solid fundamentals, a solid business that just issued a 10% dividend in the first quarter of 2007... and ridiculous upside. But before I tell you all about it, let me first make this confession...

Please Allow Me to... Contradict Myself

Last year I vowed never to add another penny stock to this portfolio. The company that had me so riled up was CECO, which shot up 150% in a single trading session last week, coincidentally.

Anyway, we're dipping into the micro-cap well once again. But this time we've got better fundamentals and a solid track record behind us...

This time it's a company called Green Energy Resources, based in New York. GRGR is a complete buyer, processor and shipper/seller of what could be the next big commodity: biomass woodchips, or Ecogreen Coal.

These are byproduct woodchips, basically, that burn well for fuel purposes, and come entirely from second-hand trees: trees that were being cut down anyway for road building, construction and development, etc.

The company, unlike CECO, actually has an income, which is a bonus. I'll get into the fundamentals in a later article, but a really good sign is that the company just paid a 10% dividend for the first quarter.

Besides decent fundamentals, GRGR could soon find itself at the nexus of a very big problem, and a very profitable solution...

The Emperor Has No Trees

After decades of deforestation, development, pollution and naturally arid lands, China finds itself in a strange position: it's a land that's relatively devoid of large trees, and therefore large amounts of wood for construction and fuel.

As WorldWatch reported August 21, 2007:

"Today, large trees are rare in China. The country will need to take efforts to nurture them in the years ahead."

In its article "A Country with No Big Trees," WorldWatch reporter Yongfeng Feng describes a deforestation problem going back centuries.

"The exploitation of trees in China dates back thousands of years. Before the 20th century, the major destructive force was the elite ruling class of a highly centralized society, including emperors and their families, officials, and rich businesspeople.

"They constructed luxurious palaces and houses, and extravagant tombs. Those structures required huge quantities of timber. Places that served as political and economic centers were the first to be denuded."

Emperors building palaces, tombs and estates have historically sucked up every bit of lumber-quality forest in areas around Beijing, for example. For more on China's wood shortage, click here: http://www.worldwatch.org/node/5313

Using Wood to Offset Coal Pollution

The sad thing is, China's 85%-plus reliance on coal-fired powerplants could be causing much less pollution were it able to blend that coal with fuel-grade wood chips... Blending wood chips with coal creates much less CO2 emissions... and can lower fuel costs.

GRGR: Already Negotiating with China and India

And right now, Green Energy Resources is negotiating with both China and India to import their wood fiber fuels into both countries -- the two most dynamic major economies in the world. In fact, GRGR has gone so far as to negotiate a number of ships being built to move its supplies to China from the U.S.

"It's a growing market," says GER CEO Joseph Murray, who has led negotiations with the Chinese government that could lead to 10 wood-transporting ships being build in China to transport GER's goods there.

"They want to expand their co-production. We have a product that is environmentally certified that we could export to China."

Some are referring to this product as Ecogreen Coal, and it could soon become a tradeable commodity on a major exchange in Chicago or New York according to one article (http://findarticles.com/p/articles/mi_m0EIN/is_2005_May_9/ai_n13677642) wlthough this article is from two years ago!

The point is, the company's performance has been solid of late, and since it's trading well off its historic high -- and since China stocks have continued to surge this year, and this could soon be a direct China green energy play, similar to LDK Solar -- let's move now.

Action: Buy Green Energy Resources at GRGR.PK at $0.20... We won't use a TS on this position.