Three Cheers for the Smart Grid

You can often get a pretty good pulse on emerging cleantech themes by reading the pages of the Green Chip Review.

Going over my articles from the past two months, I noticed a clear trend: water and smart grid are the themes of the day.

And it's not hard to see why.

The American Southwest and Southeast are three years into the worst drought in decades. As river flows dwindle and reservoirs dry-up, mass media is beginning to cover a story we've been on top of for years.

Expect both those trends to continue: more coverage on and profits from the water sector, and Green Chip's continually beating the evening news to the punch.

The other hot theme of late ― and the one I'll expand on today ― is the inception of the smart grid.

If you're not up to speed on smart grid basics. But we're essentially talking about a complete overhaul of how electricity is delivered and monitored.

The best way to think of it is as an internet for electricity, a system that will let you see electricity use and price data in real time, rather than 30 days later.

Buzz around this sector is booming, and some related top stocks for 2010 have doubled in the past few months. Billions were allocated to the cause in the recent stimulus, but there's reason for a lot more optimism since then.

Here are three recent cheers for the smart grid.

Smart Grid Cheer #1: DoE Funding

Among the $4.5 billion set aside for smart grid development in the recent American Recovery and Reinvestment Act were grants capped at $20 million apiece.

But deploying the smart grid ― and all the efficiency advantages that come with it ― is proving to be so critical, and the projects so large, that the DoE recently raised the grant cap to $200 million.

That's a 900% increase in the cap for DoE smart grid grants so giants like IBM, GE, and even Google can dip into them to execute large projects.

Smart Grid Cheer #2: Google It (or IBM It, or GE It)

Another promising trend in smart grid development is the eagerness of the big boys to participate.

Google (NASDAQ: GOOG) has already spent millions funding smart grid start-ups like Silver Spring Networks and providing software for smart grid projects in partnership with GE (NYSE: GE).

The search giant is also forging ahead with its own smart grid project using its PowerMeter software. They've partnered with eight major utilities in the U.S., Canada, and India (more to come) that will install smart meters at their customers' homes and business. Those customers will then be able to monitor their energy use and costs in real time on a customized Google page using customized Google software.

Itron (NASDAQ: ITRI) is the first announced smart meter partner in that foray. That best stock got a nice bump when the news came out last week.

IBM (NYSE: IBM) has "committed $2 billion to fund start-ups and utilities working on smart-grid and green technology projects." And that's on top of the multi-million dollar smart grid projects they're directly involved in via component manufacturing ― not to mention their recent PR blitz about it all.

GE is in. You've seen the scarecrow commercials, right?

And Cisco's (NASDAQ: CSCO) in, too. The tech giant is trying to take a lead in networking standards for the smart grid because it sees a smart grid market worth $100 billion in the near future.

Smart grid validation couldn't be any more apparent.

Smart Grid Cheer #3: Making It Law

The House Energy and Commerce Committee passed a much-awaited energy and climate bill last week, paving the way for the committee to pass a full vote later this year.

In addition to requiring a 15% renewable target, that bill also requires a 5% energy efficiency gain by 2020.

If states can't meet the 15%/5% by 2020, they can opt for a 12% renewables mix with an 8% efficiency gain.

Either way, energy efficiency is now law. By default, so is the establishment of the smart grid.

In addition to being a $100 billion market, Cisco also thinks the smart grid will be "100 or 1,000 times larger than the Internet."

Stay tuned to Green Chip as that plays out.

Top Stocks For 2010: The Stress Tests Are Out... What Now?

I've got great news...

On Wednesday morning, Bank of America announced they'll only need another $34 billion more from Uncle Sam.

Somehow that's bullish news, according to CEO Ken Lewis.

The truth is, while we're not out of the woods just yet, we are finally starting to see some signs of a slow recovery.

Amex, JP Morgan, and the Bank of New Mellon Corp all got a passing grade on their "stress tests." And to top it off, it seems the Dow's low of 6,600 looks well behind us, and oil prices are starting to charge full steam ahead.

But like I said, we're not in the clear yet.

Want proof?

Just take a look at the sheer number of blockbuster trades that Ian Cooper's made from issuing puts in the Options Trading Pit portfolio recently.

Ian and his team are still cleaning house by safely betting that companies — major companies — will plummet.

And as far as high-profit trades go, they've been spot on for readers who can stomach the fast-paced world of options.

Of course, not many can.

In fact, over the past several months, we've been getting swamped with emails from investors who crave those rapid, reliable profits, but don't want anything to do with the all-or-nothing world of options.

If that sounds like you, trust me—You can't afford to miss this:

You see, after months of scouring the markets and applying many of his own, unique indicators to qualify worthy options plays for his Options Trading Pit readers, Ian Cooper stumbled across another moneymaking trend so astounding, some of his close friends are already talking about early retirement...

... Those very indicators he uses to uncover the +100% options plays have also been - over and over - pinpointing explosive whole top stocks for 2010 as well.

... Top stocks 2010 that don't quite fit the profile for one of his legendary options trades but still experience share price surges that rapidly and reliably skyrocket upwards of 20% - 50%.

For example, just take a look at the 265% jump that one online gaming software developer made in anticipation of the recent movement to legalize online gaming:

Then there's the 301% explosion his indicators pointed out from National Coal, after the Dow bottomed in early March:

And then there's the 182% jackpot he uncovered from, once again, anticipation of online gambling legalization with YouBet:

And those are just a few. Since Ian started following some of his "discarded" top stocks of 2010, he's been finding these opportunities left and right.

For example, earlier today, he raced upstairs to my desk to share with me two natural top gas stocks and one major oil play that those same indicators tell him are about to go absolutely ballistic!

Unfortunately, these - increasingly more common - jackpots don't fit into the scope of his Options Trading Pit... or any other advisory we offer, for that matter.

And that means that, as investors, we're leaving a lot of easy money (3 near-guaranteed winners even as I write this) on the table...

That is, until now.

In fact, I have a very special invitation I'd like to extend your way.

It's a deeply discounted, sneak-peak into a groundbreaking new advisory Ian recently launched called the Pure Asset Trader.

In it, he shares with you the details behind every single one of these explosive trades he's been uncovering... starting with the oil play that he just recommended, which could hand you rapid double (even triple) digit gains in less than a week or two.

And the two natural top gas stocks Ian has been tracking will be recommended in the next two weeks.

One thing you'll notice with Ian's new cutting-edge service is that these powerful trades come from anywhere and everywhere. That's because Ian doesn't like to pigeonhole himself - or you - into any specific sector.

The truth is, at any given moment, somewhere in the market, Ian's indicators are firing on all cylinders about one company or another, whether it be on news, general market trends, overselling, earnings reports, or any of Ian's indicators.

In other words, he's everywhere... but nowhere for too long.

And that's exactly how this unique advisory is geared - for investors like you to take advantage of the scores of rapid-fire gains coming from 2010 top stocks across the market as our economy slowly starts to recover.

Inside of just a few weeks - even in this market - not only could you recoup some of your losses... You could make fortunes without needing to rely on all-or-nothing options trades!

Plus, if you accept this offer right now, I'll show you how you could secure a test run of this $1,495 service for only $199!

A Second Chance to Buy AT&T at the Turn of the Century

Wall Street is constantly hung up on finding the next giant economy. Is China going to continue to grow as a superpower? What about India?

The suits on the Street ask themselves these questions every day. They don't realize that these superpowers aren't the only places you can make big money.

Indonesia has the world's fourth largest population, over 200 million people, but it ranks No. 16 in GDP purchasing power. Poverty and disease plague this sleeping giant. That's why the median age of the country is just 28 years old.

The country has made some progress of late through the presidency of Susilo Bambang Yudhoyono. Elected in 2004, Yudhoyono was an already important and popular figure in Indonesia after a few stints in the first couple cabinets of the fairly new democracy. He has the rank of General and is a very influential military leader worldwide.

He continues to stay popular and will, in all probability, get reelected later this year. Yudhoyono is not only a military-focused politician, he's also an economic visionary in a country that desperately needs that kind of vision.

In just his first term, he's already signed an important trade agreement with Japan, opening his country's enormous population to the world's second largest economy.

Barack Obama recently invited Yudhoyono to the White House to discuss the U.S.'s role in helping developing countries during this economic recession. The two met again a few weeks later at the G-20, which Indonesia recently joined.

All of this prestige helped Yudhoyono make Time's 100 Most Influential Persons list this year. And it's also helped segments of Indonesia's population obtain some new G-20 benefits.

Even with all of the international help, Indonesia may not ever become a superpower. But the country does provide unique opportunities…if you know where to look.

The Growth Story of the Century

One of the most exciting growth industries in the Far East is Internet service providers. According to InternetWorldStats.com, 73.8% of Japanese and 76.1% of South Koreans are online. Even about one in every four Chinese citizens now has Internet access...

Indonesia is trailing in the region with just 10.5% of its population online. Here's our growth opportunity! In 2000, only two million Indonesians had the Internet. That number is set to reach 25 million this year.

But this growing ISP industry is only part of the story…

While Indonesia continues to struggle with some basic luxuries that the Western world takes for granted ― such as cable television and wireless Internet access ― its citizens do have cell phones. In fact, around 58% of the population already has a cell phone subscription ― that's over 130 million subscriptions.

Even with so many current subscribers, growth hasn't slowed at all. The mobile phone industry is still growing at a 36% clip annually.

The reason I bring these two industries up together is because of a unique opportunity. I found a company with a 46% market share of both the broadband Internet and the cellular industries. That's the top spot. This is like finding Ma Bell at the turn of the 20th century ― minus the anti-trust issues.

You see, this company's largest investor is the Indonesian government. It's a rock solid company that I'll be recommending early next week to my top stocks for 2010 Report readers.

Economic Cycles and Protecting Ourselves

I'm a contrarian ― and a rebel, and I am fed up with people telling me that the days of America's greatness are over and we're all going to have to settle for drab, uncertain, very low-end lives to repent sins of the past and so that the rest of the world can have their "fair share" of good things. Well, perhaps some people have dug themselves holes so deep they will never manage to get out, but some of us haven't, and I suppose a lot of W&G readers are in that category or you wouldn't be here. 
 
For what you care to make of it, here is an oddball way to analyze what you should buy and to diversify your holdings pleasurably, and probably far more safely than what is left to try. There are two basic choices: Give the other half of your shirt to someone like Edward Jones and see how long it takes to lose it, or put everything into cash, metal, and gold sands, volcano power, or something else totally outside normal top stocks for 2010 and the ken of mere mortals. Agora Financial comes up with a lot of interesting propositions in areas I am totally ignorant about, so I decided to stick with what I know, which is luxury items and grocery stores. Huh?  
 
At present fundamentals are roughly as safe as downtown Beirut, and Technical Analysis isn't working well because volume is controlled by a few enormous funds, while government intervention is playing havoc with individual top stocks 2010, whole industries, the value of the dollar, interest rates, and so forth. 
 
What we could use is a way to "read" what volume, movement, and patterns once told us, and some sensible way to decide what will store intrinsic value best. Never mind profits, just holding on to the current value of what we have will do nicely in a world with 1/4% interest rates on a CD.
 
If you want to know what the average Joe is thinking don't pull out your big blue book of ten-year stock charts and start looking for cycles. This is a whole new game and requires modern tools. Two you need are absolutely free and available 24/7 on your Internet and the other is usually set out on Thursdays, free to pick up. The hopes and fears of these bad years are to be found on Craig's List and e-Bay and in what I will always think of as the "Thrifty Nickel," now called "American Classifieds." Those will tell you a lot more about economic and psychological conditions than the S&P will. Not a Keynesian in the bunch. What is fascinating is how the offerings demonstrate traditional Technical Analysis basics, including volume, support and resistance levels, and trends. Best of all, they are totally independent from the actions of managers of large funds peering at each other in terror wondering what &ld quo;a prudent man" should be doing. Glory be, there's a way to take the pulse of the country at the most fundamental (pun intended, of course) levels, ranging across a wide socioeconomic spectrum.
 
The prevailing mood of the country, measured by this method, demonstrates two factors clearly: At ground zero individuals are still having to turn loose of their toys to survive, but there is a sense, through recovering prices in some areas, that the economy is looking up in many eyes.
 
It may seem a little odd to analyze the economy in terms of what luxury goods in private hands are available and bringing, but consider that those are where intrinsic value was stored when times were good in the past. Many Americans are being divested of past treasures because the credit-based consumerism of the last couple of decades had most people believing that times would always be good and that their houses were a sure source of ever-increasing equity, much better than old-fashioned savings accounts and paying cash. They raided their brick piggy banks consistently, and then the housing market smashed. No savings, upside down mortgages, houses such a glut on the market that in some cases banks have demolished ― literally ― brand new "MacMansions" complete with the de rigueur granite kitchen counters, rather than see them destroyed by squatters. The top stocks market plunged half way to ruins and despite a hefty Spring Fling a lot of folks see it going down again sometime soon. That left the Baby Boomers more than a little concerned about what were supposed to be their golden years, and those ten years or so younger in agony over the paper profits despite being warned for a couple of years to get out. Yes, it cost a nasty sum to get out of the fund a manager had locked you into until '10, but not nearly as much as leaving it there would have.
 
Back down in the trenches it is even possible to read a lot from the sequence in which goods have come on the market. First went the toys bought by young men who put windfalls into bass boats, fancy trailers to haul them, and bigger or extra trucks. Life was good, jobs seemed secure, no wife or kiddies, buy that value on credit...and then hours started being cut and jobs lost [Painfully close to home―Ed.].
 
Farmers in trouble from rising fuel, feed, and power costs had to start turning loose of "extra" tractors and implements, almost unheard of in the annals of mechanized mules which are good for many, many decades of service. It is amazing how many tractors seem to be needed; we've got four and still don't always have just the right one for an atypical job. Given the choice of giving up a perfectly good 1954 John Deere or his youngest, some men might have wistful thoughts before listing Big Red for sale. This is part of knowing both the value and price of everything as well as what people set the most store by, not useless information.
 
The $150/barrel crude oil hit independent truckers an unbearable blow, and many small firms had no choice but to shut down. I have trucker friends who said it wasn't worth the wear and tear on their rigs at what they would make on a job with Diesel rising four dollars. The man we got Black Dog #5 (the pride of the now defunct Long Shot Trucking Company) from had tears in his eyes when he had to sell the Dawg, his joy and the last "tractor" to go, and spent half an hour pointing out all the glories of that beautifully-maintained beast that will haul a dry van box with 55,000 pounds of goods in it after he had clinched the sale. What we paid for it is practically a sin, but he couldn't hold out "until times get better."
 
Then the "We'll travel when I retire" dream popped, and motor homes and big travel trailers started coming up for sale, along with golf carts, and finer cars. Reduced income, 401Ks in the cellar, houses that can't be sold without the most horrifying loss, "down-sizing," and something had to give. 
 
This time last year we bought six used motor homes and travel trailers in excellent shape for fifty dollars a running foot, never more than a hundred. These days the price is more apt to be $150/rf. The high-end models still aren't selling, and little is as sad as a dealer's lot, but either all of the more modestly priced rooms on wheels have changed hands or those who own them are feeling a little less frantic.
 
Grandma's sterling silver that was only used at Thanksgiving has been all but a glut on the market for months...Silver has a special place in my heart, and the thought of treasures that have been in the family for perhaps a couple of centuries cast on the altar of believing things would never change, the house would always provide extra income hurts. Silver is rising dramatically on e-Bay; it requires more and more knowledge and research to find bargains. Last month I was buying sterling flatware at roughly $10-12/utensil, and tonight people are asking $15-$17 for standard patterns. The latest trend is also turning loose of fine china at bargain basement prices. 

 I still won't buy the classic hedge of postage stamps (very fragile, don't know enough), loose diamonds (not sure the IDC can maintain inflated prices; am buying sapphires and rubies), or antiques other than jade and bronze (more portable, sturdier.) This weekend good antique furniture appeared in large amounts suddenly, although the prices are "overly sanguine," shall we say?
 
In some ways storing intrinsic value in items like the last two may not sound exceptionally bright, but that's one of the hazards of shopping. You find things you just can't resist. I have a printout on my desk right now for a 1985 XJ6 Jaguar we're going to go look at tomorrow: One owner, always garaged, 138,000 miles, custom wheels worth two-thirds of the asking price, engine you could eat off of, all of the touches for which a real Jaguar is famous, and she's got to go. He's asking $1200 for a very luxurious car with at least another hundred thousand miles in her. In short, it is a grand time to want to buy cars if you have cash, even new ones.

A classic Rockefeller story is of purchasing a yacht early in the thirties for a thousand dollars a running foot, which, he said, "Seemed like a very good price for a yacht."  Indeed, it was...and he had the cash at the right time.
 
The moral of this tale is to use what you know best to manage your cash correctly now. Other than that, put it in gold, silver, survival supplies and equipment...and even a few things that merely make your eyes light up. Life is short, and beautiful objects of intrinsic beauty will gladden your heart and are a lot more pleasurable than giving in to that urge to get back into the market.

I saw in 1992 ― when the interest rate dropped to a shocking four per cent ― that in years to come widows and retirees were going to be in for very bad times. Why didn't anyone else who isn't a professional analyst? Why didn't they believe their "men of affairs," as financial advisors used to be called?
 
I expect that this will turn out better than a prospectus promising that if we buy six top stocks for 2010 two will fail, three will do reasonably well, and one will give us thousand per cent returns. If I'm wrong, I'm buying at 25 cents on the dollar in a lot of instances, and a Jaguar will always be a Jaguar. The world seems to be one giant yard sale, and I submit that traditional luxuries will recover sooner than Government Motors will.