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In
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*
Op-Ed: Obama's Pick Very Good For Some Investors
* The Market
Does It.... Finally
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Op-Ed:
Obama's Pick Very Good For Some Investors |
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As far as the
Micro
Cap Press is concerned, President-Elect Obama couldn't have made
a better choice for his Secretary of Energy. He selected Nobel Prize
Winner and well-known alternative-energy advocate Dr. Steven Chu
to head the nation's energy development and regulation arm.
 If
you're an alternative energy investor, or even just a philosophical
supporter, this is great news. Why? When we say Chu is an advocate,
we don't just mean he speaks in favor of the idea - we mean he's decided
and adamant about developing clean-energy technology and getting rid of
dirty or inefficient ones.
So, if there
was any doubt about the kind of support the industry would get from the
White House, this news should wipe away any major concerns. Obama
was and is prepared to spend billions on renewable energy development,
and now he's added a sharpshooter to his clean-energy army; Chu
may know as much as anybody about what really needs to happen
to find the balance between cost and benefit when it comes to clean energy.
As far as who
Chu is though, let's let him use his own words to describe his view.
Here's a handful of quotes that make it pretty clear how he's thinking...
"If
I were emperor of the world, I would put the pedal to the floor on energy
efficiency and conservation for the next decade"
"Free market
forces aren't going to do this" [in reference to carbon emissions]
"What the
world does in the coming decade will have enormous consequences that will
last for centuries ... It is imperative that we begin without further delay."
[from
a talk he gave shortly after he was picked be Obama]
"Coal
is my worst nightmare" [from
an interview earlier in the year, and in reference to the pollution created
by burning coal to create energy]
Well Dr. Chu, you're
not the 'emperor of the world' but you are pretty much this
nation's energy czar. Here's your chance to make a big dent in something
we all want to go away, but something we don't even know how to
feasibly control - carbon pollution.
In the meantime,
there's an upside for investors. All those alternative energy themes
we've been talking about at MicroCapPress.com? The Chu news just made
them all a lot more viable.
During the election
process it wasn't entirely clear which - if any - alternative energy
industries had a real future, since many of them are highly-subsidized
by the government. Some of them went back on life support in the fall,
though
only temporarily, when the government gave several of these programs
at least enough funding to keep them alive for a while longer. When Obama
was elected, their odds improved even more. With Steven Chu stepping
in as the Secretary of Energy, their outlook was strengthened yet again.
 We
think Chu could be particularly advantageous for China
Energy Recovery (OTCBB: CGYV). It's technically not an alternative
energy company, but rather an energy efficiency company... and one
with a whole lot to gain from someone like Chu.
What does
China Energy Recovery do? They make boilers to capture waste heat and
reduce pollution emitted by, that's right, coal-burning plants
and factories.
Now, do you
remember the thorn in Chu's side? He said "Coal is my worst nightmare",
which doesn't leave any gray area.
Do you think
Chu's attitude might eventually spark some interest in the solution China
Energy can offer the United States? Sure, Steven Chu would probably
love to get rid of coal as an energy source altogether. However, that's
not going to happen.
Though the estimates
are surprisingly varied, coal produces somewhere between 1/3 and 1/2
of our nation's energy. There's nothing we have in place that could
offset coal's absence when it comes to energy creation, and there won't
be
for a while. So, coal's not going away - we just need to find a
way to make it cleaner. And, it looks like Chu wants to.
That's good
news for long-term alternative energy investors, and CGYV investors
in particular.
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The
Market Does It.... Finally |
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It's still a
tad premature to get giddy, but today's market action knocked down a few
more potential barriers to a recovery.
We're not big
fans of these one-day-wonder rallies like today's 5% move. Those bursts
are difficult to sustain, and lately, haven't been sustained at all.
It seems like every step forward was met with two steps back.
 More
recently though, it seems like we're able to take one step forward and
only follow that with one step back. That's why the market is basically
where it was two months ago - the battlefield's front lines really haven't
gained or lost ground. Such is the case when things are getting turned
around.
After combining
today's gains with the last three weeks, however, we have to wonder
if we're actually (and finally) in a mode of taking two steps forward
and only one step back. It's still something of a headache thanks to a
boatload of volatility, but at least it's progress.
We're not just
pulling the idea out of a hat either - there are a couple of specific
things
we see on our charts right now suggesting the undertow reallyhas
improved. The first one is the cross above the 50 day moving average
line, and the second is the VIX's
tumble under a key support line (which is bullish for stocks).
The nearby chart
says it all - to get above the 50 day line means the intermediate-term
momentum has to have changed for the better, and the VIX's trend largely
mirrors the markets.
We would never
deny the Fed 'bought' this rally with a rate cut that sent borrowing costs
down to unprecedented levels. And, given that the dip in interest
rates treats the symptom rather than the problem, it's not
like the market isn't still vulnerable. In fact, there's a very
good chance that profit-takers will come out of the woodwork tomorrow,
as they have so many times in recent weeks. So, don't be shocked to see
a pullback tomorrow, or sometime later this week. The thing to watch for
is the response to such a selloff. As long as we don't take two
steps backward, the bulls are fine. In fact, they've got more to be optimistic
about now than they have in several months.
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Updated: 6:01 am PDT (13:01 GMT), September 9, 2010
