Add Rio Tinto to the Green Investments Portfolio

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

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

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

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"

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

Starbucks... Ready for a Triple?

The Motley Fool is talking about Starbucks (SBUX) today.

http://www.fool.com/investing/general/2007/11/05/a-triple-in-the-making.aspx

In his article, Rex Moore list Starbucks as one of several companies that are poised for a possible triple from here.

His reasons: SBUX has high net margins and high return on assets when compared to its peers in the restaurant industry.

Starbucks: A Green Investment Poised for a Comeback

Starbucks is, of course, part of our Evergreen Portfolio. So far, this enigmatic stock has drifted down from our entry by about 5.5%.

The stock has drifted down about 25% over the past year. Meanwhile, it's opening stores at breakneck pace in China... earnings are falling in line with expectations... Starbucks is doing all the right things with its employees, the model of a socially responsible business.

AND the company's green track record is unparalelled in the industry.

Yet... and yet.

It's rather depressing. And it doesn't make much sense. But the markets are not a logical place.

Stocks, like people, have their cycles and patterns... ups and downs. Right now, SBUX isn't "feeling very pretty." Its confidence has ebbed. But it's working out at the gym, getting back in shape and paying its dues (expansion into China and other emerging markets).

And that's why I agree with Moore's assessment: SBUX is overdue for a serious bounceback. Let's just hope it doesn't hit our trailing stop before the bounce begins.

Good trading,

James

Green Investments Cleantech Pick On the Way

I'm researching cleantech right now looking for the perfect play for a volatile market. This area could yield some good nuggets.

What I'm zeroing in on right now are companies with hefty public contracts. In other words, cleantech companies that will get paid even if a recession hits - or if the markets crash.

While the stock might dip, regardless, it shouldn't crater, in the event of a broad market turndown. If a pullback hits suddenly, companies without fundamentals will feel it the most (if you need a reminder of this phenomenon, just look back to the tech wreck of 2000).

Till then, good day. And hello to our new friends at http://agreenearth.blogspot.com/, an excellent website (with some pretty nice artwork, too) on all aspects of living green and having fun.

James