Thanks for all the feedback regarding our Las Vegas Sands (LVS) suggestion. So far, pretty much everyone has agreed with the optimistic assessment. However, in an effort to be fair and balanced, we want to put the dissenting opinions on the table too; all intelligent discussions bear fruit of some sort.

One of our readers wrote back…

Thank you for your email, but I must say I disagree with your call for LVS.

With the latest round of US immigration restrictions, it increasingly becomes more difficult for foreigners (Asians in particular) to travel to the US.  This, in addition to the opening of Casinos in Macao, will, unfortunately, further empty the beautiful Sin City.  While I understand that LVS has substantial exposure to Macao (China), one can’t ignore that LAS is its home turf.  The recent recession in the US has further demonstrated that LAS is feeling the recession, and will continue to do so for the next 2 years, if it is to depend solely on the national consumer …checkmate.

While I will still be checking into LAS for the next 2 yrs for leisure purposes, I am checking out of any invesments in the Sin city for a while…

Thanks for the response; many good points there.

Basically, we think everything you said was true except the big one you closed with…”The recent recession in the US has further demonstrated that LAS is feeling the recession, and will continue to do so for the next 2 years”.

That’s the ultimate argument behind our bullishness on LVS…the recession won’t last two more years.

Yes, Vegas has felt a lull…in revenue and earnings. The June numbers (foot traffic and house take) were both down. However, that history in no way reflects what’s likely to be in store for the next two years. We think the recession will be over within two years, one way or another, if it’s not over already. So, we aren’t willing to make the same assumption you are about two more years of weakness for casino stocks.

The reason we don’t make that blind jump? History. If you take a look at the long-term chart of casino stocks, you’ll see they started to recover well before whatever the crisis was at the time came to a close. These stocks are four for four when it comes to rebounding right when things look the worst.

Logical? No, but when’s the market been logical? We’ve seen time and time again how stocks are priced at what people think they’re going to be worth six to twelve months from now. True valuations rarely play a role in ‘buying low and selling high’.

In other words, we’re not waiting for all the planets to line up perfectly…they just need to appear to be headed in that direction. It’s not a sure thing, but waiting for the perfect time to jump in will probably get you in too late.

Are we right? Who knows? Only time will tell; that’s the ‘risk’ side of the risk/reward ratio. In our view, the reward outweighs the risk here.

Another part of the issue has been difficulty getting into the United States (and therefore Vegas) because of immigration restrictions. The bigger part of it, however, we think has to do with expenses…the hotels are ‘cheaper’ to foreigners when the dollar is weak, but air travel costs more than offset that. With oil down big-time lately, getting to Vegas will be easier to justify…for those who can cross the border.

Any other thoughts on Las Vegas Sands, pro or con? Leave ‘em below.

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This horse race has become kind of fun. It all started back on July 3rd, in our mid-year wrap-up edition. In a nutshell, we were looking for value stocks to start outpacing growth stocks. We were also looking for mid-cap growth to be harshly dethroned as the leader, and anticipated large cap value would pull out of its slump. The other cap/style groups weren’t as easy to read, so we didn’t make a firm forecast for them until July 17th. At that time we started to favor small caps (value as well as growth, but mostly value).

Take a look at table below. The two-month total is actually all of last month’s results combined with the to-date results of this month…pretty much the timeframe in which we’ve been interested. The numbers tell the tale.

Sure enough, small caps are leading the pack, value is dominating, and mid cap growth is getting crushed. You can thank us later.

The lesson learned is simple enough…when rotation becomes evident, act on it. You won’t always be right (nor will we), but you should right often enough to offset the times when you’re not. After all, the difference between the top and bottom performers is 12.5 percentage points….and that’s just for a five week period! Imagine what a difference this exercise could mean if done a few times a year.

Is it too late to act now? Not entirely, though the bulk of the disparity is on the past. You may be just as well off waiting for the next style and market cap rotation hints. We’ll let you know when we see them.

By the way, the obvious vehicle to turn these theories into tangible trades is via style and market cap ETFs. However, we also encourage you to look for individual stocks within each of these groups. The correlation within each style/cap cluster is surprisingly strong. And, if you can find the hot sector at the time, you stand to do even better. A little more work? Yeah, but worth it.

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Continuing to work through a series of reader-submitted micro cap trading ideas, today we’ll submit Platinum Studios (PDOS) for consideration.

Platinum Studios is an entertainment company that specializes in developing and adapting comics and graphic novel content to feature films, television, animation, games, mobile wireless, gaming, merchandising, and other media. Their comic characters make up the largest library in the world, which contains more than 5,622 characters.

Some of their feature films will include: “Cowboys and Aliens”  & “Atlantis Rising” (by Dreamworks), “Dylan Dog”, “Witchblade”,  and “Unique” by Disney. Scott Rosenberg (who sold Men in Black to Sony) is the CEO.

Working with leading companies in the entertainment and new media sectors, Platinum Studios is emerging as one of the front-runners in the creation of new content across ALL media platforms. The comparison being made most often is to Marvel Entertainment (MVL), which started out as comic book company. In only a couple of decades though, Marvel has become an entertainment company…to say the least. By the way, Marvel’s stock is only worth about nine times what is was a decade ago. 

Platinum’s learning curve may not even be that long, since many of the special effects and movie technology advancements have only been made on the last six years or so. Toss in the fact that Platinum has an even larger library than Marvel, and it makes you wonder where it could all go.

The only pitfall the editorial staff of the Micro Cap Press sees is this…even though the library of comic characters is bigger than Marvel’s, there’s no real ’star power’. Marvel’s Hulk, Spider-Man, and X-Men were all established heroes known pretty much to everyone. Platinum will have to make their heroes a household name to get as much traction…..maybe.

The counter-argument is a good one - the people working on Platinum’s films right now have successfully launched ‘new’ character franchises before.

The name ’Gale Anne Hurd’ may or may not ring a bell with you, but the three ”Terminator” movies are recognized by pretty much everyone. Guess who turned those nothing ideas into the Terminator franchise? It was Gale Ann Hurd.

And Gale’s done more than that. It only started in 1984 with “Terminator”, which she also co-wrote with James Cameron. She did “Aliens” two years later. “The Abyss” followed in 1989, and then “Terminator 2″ and “Terminator 3″ (3 alone did $420 million) after that. She also did the first “The Hulk”.

So what? Well, Gale’s now teamed up with Platinum on some of the films-in-the-works we mentioned at the onset.

We don’t really know where that’ll go. Perhaps nowhere. Or, perhaps Platinum’s sitting on the next Terminator-like franchise. We just don’t know. With all the good company Platinum is keeping though, we have no problem directing your attention their way.

Any thoughts, feedback, or additional information is welcome; just fill in the form below.

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You know by now we’re always on the lookout for the next great bulletin board stock pick. That’s why we constantly scour the world of micro caps for names that are on the move. Though the chart and momentum aren’t everything, they’re an important piece of the puzzle. That’s why the stocks below got our attention….something is going on with ‘em, becuase the charts and/or volume have perked up in the last few days.

You’ll still need to do some fundamental due diligence, but we think these picks are a great place to start your search.

Skinny Nutritional (SKNY) - From 3 cents in March to 48 cents in May? Wow. The chart slid back to a low of 17 cents last month, but the move back up to 38 cents hints that the next batch of buyers is piling in.

Pure Biofuels (PBOF) - This chart looks a lot like Skinny’s….strong Q2 move, then a pullback, and now a recovery effort. Don’t get too excited yet though - we’ve seen multiple head-fakes from PBOF.

Microfield Group (MICG) - The big pullback during Q1 has set up an interesting opportunity for the rest of the year. This one looks particularly compelling because the chart made a slow, controlled turn into a bullish mode….without a lot of volatility, but with healthy volume. That’s common when the company is actually doing something specific to justify the price, so you’ll really want to dig in deep here to find out what’s going on.

Copytele Inc. (COPY) - The chart looks suspicious. There’s clear horizontal support at 66 cents, but falling resistance that extends back to November. It seems more like a ‘trade’ then anything else, and a risky one at that - the recent move appears unsustainable.

Ubid.com (UBHI) - This is the first time Micro Cap Pressers have seen this name and ticker. We pointed it out about a month ago for the same reason….the stock was on the move. Following our coverage UBHI did indeed rally. It cooled off a few days later, but once again is drawing some interest. Considering this is the second time we’ve seen UBHI pop up, maybe we should take it at face value.

If you have any thoughts or information to add about any of these companies - fundamentals in particular - just use the form below to leave a note.

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Ouch! Unemployment at a four-year high sure doesn’t feel good….and it’s not. But, it’s not a wholesale reason to bail out of stocks. OK, maybe it is, but as always that really depends on a host of other things.

From a directional perspective, it’s bad. Rising unemployment is correlated with a falling market. And, not only is unemployment on the rise, it’s not yet at previous ‘high’ levels.

From an absolute perspective, it actually could be good. The higher it goes, the closer to a bottom (for stocks) we get. You’ll also see the market tends to rebound a few months before unemployment rates start to fall back. So, we don’t necessarily want to wait until we’re absolutely sure unemployment is improving to take an investment plunge. Besides, there’s no particular watermark that unemployment has to reach to peak. It peaked at 6.3% in 2003, but at 7.8% in 1992.

The point is, don’t jump to conclusions. There’s always more to the story.

As for our take on the current data, if we had to take a side we’d side with the bears for now. The correlation is just to strong. On that note - mostly for future reference - notice how strong the historical correlation is between cyclical bear markets and rising unemployment.

We’ll continue to watch all the important economic indicators though. Just bear in mind the market has a tendency to improve before the economy does; there’s no one-stop tool.

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We’re always open to new trading ideas, particularly from the micro cap world. Not that we’re looking to make this a free-for all, but if it’s legitimate, we’re open-minded. In any case, one of these recent ideas submitted by a fan/reader was Brilliant Technology Corporation (BLLN.PK). Here’s a quick take on the company…

Have you heard of Qtrax? Basically, it’s a free/legal p2p (peer to peer) music download site. It was supposed to launch in January with signed deals from the four major record labels…Universal ,EMI, Sony, and Warner. Right before the site was launched though, all four labels came out pulled out of the deal.

Since then, Qtrax was re-launched….though on a very low key basis. Only Universal and EMI - and a few independent labels - were on board. Still, it’s enough - the site is now up and running with free and legal downloads from Universal’s catalog, and more music is added daily. Sony and Warner are also rumored to be following that lead and interested in licensing their music via the same venue.

Conceptually it makes sense. Most music downloaded over the web is still illegally transferred, but there’s a market for monetization of the medium. How much? Hard to say. However, considering iTunes Rhapsody is the only viable competition we’ve found, Qtrax could penetrate the market fairly well.

What’s any of this got to do with Brilliant Technology Corporation? Qtrax is a subsidiary of Brilliant. To the best of our knowledge, it’s their primary and sole business.

As for the stock, we’ve seen worse. It rallied with the rest of the market a couple of weeks ago, but has since fallen back with the market.

We’re not making a judgment call either way, mostly because it’s still new, and we really can’t get a grip on how much revenue and earnings this kind of thing could generate. But, we did want to put it out there so our readers could explore the opportunity. Might be worth watching.

Any additional thoughts or information are welcome; just use the links and space below.

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Late last week we heard what the media considered to be somewhat-good news….the Michigan Sentiment Index had ticked up from 56.4 to 61.2 in July. Since it’s a measure of consumer optimism, and higher readings theoretically indicate higher odds of bullishness, investors welcomed the idea.

We don’t disagree with the theory - the better the mood, the better the market. What we find ridiculous is a handful of things the likes of which we’ve pointed out (rhetorical questions we’ve asked) several times now. They are…

• If last month’s multi-year low reading of 56.4 was a reason to panic, can the move to 61.2 be a reason to celebrate? After all, we’re still at multi-year lows.
• Wouldn’t it have been better to ‘get bullish’ based on the sentiment index prior to the big rally? For that matter, wouldn’t it have been better to ‘get bearish’ based on the June index reading of 56.4 before the market started falling apart in May?
• Why doesn’t the media provide some context…or at least verify that any particular piece of economic data has the assumed impact?

There are no answers to our rhetorical questions. The only comment we can make is this - the media is either late, or irrelevant, most of the time. And, they sure as heck aren’t complete. We’ve yet to see any journalist create anything close to the chart we’ve created below.

Take a look and see if you spot the uselessness of merely-cursory coverage of ‘economic news’.

‘One shot’ economic data is of no value to you as an investor. The trend is the key. Moreover, ‘opinion’ data is usually a better contrarian tool than a predictive tool, meaning you should be betting on the market when things feel horrible, and betting against the market when things feel great.

As for the Michigan Sentiment Index, it;s more likely to look terrifying at market bottoms, and look bullet-proof at market tops…..which is just the opposite of what you’ve been told. The historical results show it, even though the talking heads pretty much say the opposite.

None of this is news to the Micro Cap Press or its readers. This whole site was founded on the idea of providing information that was actually helpful to investors. We’re still in minority when it comes to financial media, but that’s fine by us. Keep reading our site; we cover the news and its actual impact….not assumptions.

To learn more about our strategies for using economic data to make more money as an investor, check out our original article ‘Economics 101: What’s Really Good For The Market’.

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Yesterday we gave you a report card from our July 3rd style and market cap forecast. Today we’re going to update our sector expectations. In a nutshell, we were basically right.

We favored financial stocks, feeling they were undervalued. We liked telecom as well. We suggested investors steer clear of energy and basic materials, as they had passed their prime. We also observed how utilities and staples had shown the most relative strength at that time. Take a look at how things have panned out since then.

The one surprise was transportation - we assumed they had peaked in May, as they fell the fastest in June and early July. However, they’ve recovered pretty well. Maybe there’s something to them after all. We think telecom is still an undervalued area….mobile telecom in particular.

We’ll keep tabs on these charts, but we’re still expecting the same - it’s rotation time. The six month leaders are apt to become the laggards, and the six monght laggards are apt to take the lead. We’re already seeing hints of this.

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It was about a week ago today we updated our expectations regarding styles (value versus growth) and market cap (large versus small). The initial discussion took place in the July 3rd edition, but a wild market pretty much required an update on the 17th. Now - though only five days later - it’s time to revisit the theory….that’s just how quickly things have been moving.

You might recall we were looking for simple rotation. By that, we just meant growth’s leadership in the early part of the year was going to be trumped by a revival of value. In terms of market cap, we specifically felt mid cap growth was going to weaken considerably, and anticipated large cap value would pull itself out of the deep hole in which it had been buried. 

By the 17th (last Thursday) we were already seeing hints of this rotation. And how about since then? Check out the results table - you can see for yourself what’s happened over the last five days (which doesn’t include today’s data). Value has led the way…mostly small cap, but large cap too. Growth has trailed. Mid cap and large cap growth have decidedly not participated in the bounce. That’s pretty much what we expected.

So is now the time to pile on the leaders and dump the laggards? Not quite. The time to do so was a week ago, or three weeks ago. No, at this point we think the market’s going to take a break….perhaps a long weekend. That’s fine - we need to burn off some of the euphoria and see stocks fall back a bit. When the profit-taking is done, then we can start fishing based on this relative strength in certain areas. This isn’t a five-day war. Five days is just a battle…the war will last for weeks. And, timing is still half the battle.

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Just remember you saw it here first! Did anybody see the July 21st edition of Fortune magazine (plus the online version)? The cover featured an electric car, which we covered the heck out of about a month ago. In fact, the cover specifically featured the Tesla Roadster, which we specifically highlighted about a month ago.

Are we saying to gloat? No. Well, maybe a little. Mostly we’re mentioning it to reiterate the same point we were making a month ago…that electric cars - as in 100% battery powered - have a big place in the future. In fact, they may have the only place in the future.

By the same token, we’ll use Fortune magazine to reiterate a separate point we made, once again, about a month ago.

This industry is making its way out of the ‘alternative’ phase and into the ‘mainstream’….in terms of technology as well as within the media. We used a Business Week article about electric cars in late June as evidence of this reality, but adding Fortune to the list makes our case even stronger.

The point? Read the blog. If we’re going to cover news and events and trends before the mainstream media does, how can you not want to? Tesla isn’t a publicly-traded company, but if it was, you can bet a magazine article like that would drive the stock higher. If you’re in tune with our blog and newsletter, you can use our information to beat the crowd…and not need to chase a rally.

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We’ve been following clean energy investments for quite some time, and more recently focused on solar power stocks as one of a few ‘green friendly’ niches. The topic was well received, and also raised a lot of good, common sense questions. In response to those queries - and after some thought from our editorial staff - we’ve basically boiled down the overarching solar stock questions into one simple question. This one question, however, may ultimately be the only one that really matters when it comes to picking one or any of these stocks.

Question: Which solar power company can bring the kilowatt cost per hour to under 10 cents?

The national average cost per kilowatt hour of conventional electricity is 10 cents. Unless a solar power plant can do close to the same (without government subsidies), who would want to pay for solar power….even with the environmental benefits?

Some companies are getting close; others are not. That’s the hurdle for all of them though.

On a side note, we also want to clarify a matter that may not be totally clear to a solar stock newcomer. There are actually two ways to produce solar powered electricity.

• The most familiar way is via photovoltaic panels that convert sunlight directly into electricity inside the panel itself. Photovoltaic energy costs between 17 and 27 cents per kilowatt hour, on average.
• The alternative is solar thermal power, which magnifies the sun’s rays to create heat. That heat is used to boil water, which in turn is used to crank a steam-engined generator. This kind of electricity production costs between 13 and 22 cents per kilowatt hour. Don’t get too excited yet though….the plants that can do this really need to be in the southwest part of the U.S. where the sun is the strongest. Once generated, the power needs to be transported to where people actually live. Those lines can cost more than $1 million per mile.

In short, it’s still about dollars and cents for the consumer. At the same time, the technology has to be profitable and marketable for the company creating it. A company that can maximize the output of their solar panels or thermal plants, while minimizing their cost associated with building them, is the key.  

Over the next few days we’ll be reviewing some of the companies that look like they’re getting close to this important breakthrough. We may also be panning some stocks that aren’t even close to doing so. Stay tuned.

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The market may have spent the last month getting whacked, but several bulletin board stocks shrugged it off and managed to keep moving higher. Whatever the reason, the ones that survived and thrived many deserve a closer look, as they may be hot small cap stock picks. In no particular order, they are….

• BioSpecifics Tech (BSTC) - Biotech’s been hot, but this outfit doesn’t appear to have a hot product in the hopper. XIAFLEX is on Phase III testing, but the market is small.
• TraceGuard Technologies (TCGD)
• DynaMotive Energy (DYMTF) 
• Coastal Caribbean (COCBF)
• Zap (ZAAP) - Remember our multiple mentions about the investment merits of the elecrtic car? Maybe somebody is listening. Though Zap’s cars looked relatively uncool, function before form may be the key here.
• Oromin Explorations (OLEPF)
• Modavox Inc. (MDVX) - Modavox makes and distributes audio and video content for the Internet…..mostly Internet radio. The company’s got a market, because they have revenue growth. The problem is, they don’t have profits. Maybe that’s set to change eventually, though it would need to be a paradigm shift for the industry. Modavox has cited news to that effect, however.
• uBid.com Holdings (UBHI) - Another Internet auction site? Ubid is the home of the incredible shrinking revenue. We think the company will need a total overhaul to survive; current investors don’t seem to agree. The stock came to life in early May when they unveiled an excess inventory liquidation program. Maybe that will do the trick, though we’re not making that bet yet.
• Financial Media Group (FNGP) - This diversified financial media organization is actually doing reasonably well as far as unprofitable companies go. Unlike most unprofitable outfits, FNGP is making measurable progress towards a positive bottom line. In other words, the stock’s rise on higher volume may actually be merited.
• U.S. Precious Metals (USPM)
• International Isotopes (INIS)
• Biotime Inc. (BTIM) - Another biotech company. BioTime is working on blood substitutes, and recently partnered with Embryome Sciences to make a map of all the cell types derived from human embryonic stem cells. This is likely to be the first step in the production of what could be hundred of stem cell lines. The mapping could take  months, but the creation of stem cells could take an unknown amount of time (more than less).

This is hardly due diligence. In fact, odds are more than one of these stocks is on our ‘hot’ list and doesn’t deserve to be.  These tickers are only here because they somehow managed to appreciate in price recently; no credence was given to whether or not the underlying company has any merit.

We’ll do further research as we can, but if you decide to take a plunge on your own it’s imperative you do plenty of homework. Also, if you opt to look further into these small cap trading ideas, please share the wealth (i.e. knowledge). You can post any of your findings using the link below. 

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As we wrap up all of your discussion and inquiries regarding our recent look at ‘clean energy’ investing, we wanted to save the best for last. Here’s a pretty broad question, but we think we have a great answer(s)… 

Hi,
Could you refer more alternative car stocks that haven’t popped yet and or energy; wind, solar, thermal ocean.
Regards,
Speculative and Aggressive

Thanks S&A. We could mention more companies, but there are probably too many to list and still make sense of them. Instead, we’re going to list some of the better websites and resources we found that could help you find these eco-friendly companies on your own. Bear in mind these aren’t recommendations, nor is our list exhaustive. It’s a good place to start though.

EV - World. Would you believe there’s an entire site devoted to the electric car industry. This site isn’t focused on the individual or investable companies in the electric car world. Rather, it’s focused on the advancement of the technology. Still, you can get a good feel for who’s getting close to the end-goal, and what the future looks like. Hopefully some of the companies leading the race are publicly-traded.

‘The Electric Car Lives’. This isn’t a site - it’s a businessweek.com article. It’s a good overview though. We featured it here just to show how the concept is getting mainstream attention now. Business Week is hardly a fringe publication.

Alternative Energy Wind Power News. The site is actually an ‘all things alternative’ site, but they do a particularly good job with wind-related news. Mostly a forum.

American Wind Energy Association. This site is actually for industry insiders, which in many ways is better for industry investors. A lot of good data, stats, and government-related actions are highlighted here.

Global Investing Today - Geothermal. This is another ‘all things energy site’. They do a particularly thorough job with geothermal resources though. There’s still not a pure list of stocks cited here, but as quickly as they push through industry news, you’ll see several tickers in a short period of time.

Geotherma Info. This is actually a blog. Though we have no desire to become a blog directory, this site was a great resource for industry news as well as links to investment-specific sites.

Solarbuzz.com. - Enough said. There’s actually a ‘corporate news’ section of the site that lists announcements from publicly-traded companies. You may be able to pick up a few ideas there.

SolarIntell.com. - Another blog, this one with a solar focus. However, this site is exclusively dedicated to solar power stocks. There’s a decent list of publicly-traded companies.

Like we mentioned, this only scratches the surface. You’ll also see that we didn’t mention any specific companies or tickers. That was intentional. The industry changes too quickly, and frankly, most of the alternative energy stocks floating around today won’t be here a year from now. We suggest you continue to monitor the site; we’ll update you of major industry news or interesting alternative energy stocks. 

If you have another site of interest that could be of value to investors, leave the link below.

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Though this bulletin board stock may be at a crossroads, the underlying company has continued to find a path to success. Of course we’re talking about micro-cap stock Broadcast International (BCST)….a little company we mentioned last November, which has since managed to keep our attention.

It was only a couple of days ago we featured the ticker again, after we observed the stock’s familiar retreat to the 200 day moving average line (which was where the prior rally started). Though BCST hasn’t used the long-term moving average line as a springboard yet, the idea is still in play.

At the time we had no idea today’s news was on the way; this morning we learned Broadcast International has been granted another key patent to protect their video compression technology. This particular patent allows for switching of settings within a certain codec (the code that translates digital data into streaming images) to maintain a target data rate while also sustaining video quality. It’s one of eight inter-related patents the company has been allowed.

The company’s core business is reducing the amount of bandwidth required to transmit digital video content via the Internet. As more and more data is being delivered via clogged web transmission pipelines, smaller files and more efficient file transfer are becoming critical. Broadcast International offers a better way to send digital audio/video content.

The technology works. However - like far too many things - consumers may not do anything about the Internet bottleneck until they absolutely have to. As such, Broadcast International may not be fully appreciated (fiscally or otherwise) for a while. In the meantime, we’ve found to be a pretty good ‘trading’ stock.

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One of the common pitfalls of investing - particularly with small caps - is that great technology and great companies don’t always mean the underlying stock is a great investment. Of course, you have to give a budding company time to capitalize on their technology. Take ZAP (ZAAP) for instance. As a small cap stock investment, this electric car company has been lackluster. However, could it ever be great in the future? Here’s a slice of our thinking (prompted by this reader e-mail)…

I have had Zap stock for sometime and it still isn’t back to my entry point. The new investor and buy off of convertible debt can’t hurt. They are very slow at getting exposure to the market. I want to buy a car but dealers are to far away. Maybe with the $5 million investment they will move ahead with a more aggressive dealer net work.

Thanks for the post - all good things to think about. It’s true the stock hasn’t been much to cheer about. Even with the recent move from 41 cents to 98 cents, the stock is still no higher than it was a year ago.

All we can say is….well, we really can’t say anything. You’ve pretty much seen the good, bad, and ugly here. Capital is key, but even, so there’s never a guarantee. The stock is still in the red for many investors. Will that change? Maybe, but don’t assume that a well-performing company will automatically mean the stock goes higher.

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Our comments last week about the Dow Theory (and its currently-bullish mode) prompted some feedback from our readers. Some of you agreed, and some disagreed. We’ll try and work through all of it, starting with this e-mail.

Dow Theory indicated our entry into a bear market at the end of last year when we slipped below the 200 MA for more than a few weeks - we recently retested it and failed miserably.   Look at recent volumes, the bear market rally is fading fast.

Thanks for the note. We’re not sure what you’re calling the Dow Theory here. For our purposes, the ‘theory’ only involves the leadership of the transportation stocks or the industrial stocks. Where one goes, the other will eventually follow. We used the 200 day moving average line not because it’s a component of the theory, but simply because we needed some sort of baseline to compare apples to apples. (We could have used a 100 day average, or a 250 day average, or a 184 day average….it was arbitrary. We just chose 200 because it’s fairly common.)

Yes, the pullback from late last year was ‘predicted’ by the Dow Theory because the transportation stock sold off first. The 200 day average indicated the same thing.

Yes, the 200 day line acted as a resistance line for the Dow Industrials a few days ago, which also is bearish.

However, with the transportation stocks well above their 200 day line, that’s actually bullish for the overall market even though the Industrials are struggling with the 200 day moving average line.

In other words, we’re seeing mixed signals.

Which is right? That’s the question we’re asking. We can’t say yet either. We’re just saying according to the Dow Theory, the current scenario is bullish. Certainly other analysis could suggest otherwise.

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We always welcome feedback and ideas regarding our macro-themes, and got a really good one following our discussion of electric cars last week. Another budding alternative idea is an air-powered car. We almost mentioned the industry in the previous look, but could find next to nothing about it. Fortunately one of our readers was able to shed some light in air-powered cars:

The same can be said about the air car [that the industry is starting to solidify] (google: air car france; air car australia). This is a technology only picked up by an Indian car company so far (Tata Motors). Why not here in the US? Why not Japan? Why not Korea? Perhaps it is because one company (MDI) has the 19 patents that are needed for immediate manufacture. One very unique thing the air car offers that the electric car cannot is air conditioning…the air coming out of the tanks running the engine is at -20 degrees F, which can be transferred to the cab. I think Steve Jobs should make a deal with MDI and manufacture the “iCar” in the US.

Thanks for the data and points to consider.

As surprising as it may sound, it’s true - Tata Motors (TTM) is indeed making and selling air-compression cars that work. Though it’s not a ‘pure play’, it’s a company with a hand in the industry. Here’s a quick look and description of the air car, which has been around for a year now.

Though the fact that the car works is impressive, the same can’t be said for the stock. The India-based auto-maker’s stock also trades on the NYSE with the ticker ‘TTM’.

Another serious contender in the game is Zero Pollution Motors. They’re not a publicly-traded company, but they expect to bring air-powered vehicles to the United States sometime in 2009 or 2010. The big difference between these cars and the functional electric cars already racing down our streets is the price tag. ZPM’s cars are expected to cost less than $20K a piece.

The downside to Zero Polution Motor’s cars is the same as Tata’s compression-powered cars….they look goofy. Open-minded drivers may not have a problem with their looks, but many U.S. drivers may not be willing to give up their full-sized normal cars.

Anybody else know of any companies working on air-compression powered cars? We found very few. Chime in below.

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While we were optimistic about the electric car industry, we also acknowledge there’s two sides to every coin. We got this e-mail from a reader describing Honda’s (HMC) less-than-great experience with electric cars.

Honda has evaluated all electric cars and has not found they to work for the average person. They just introduced the first fuel cell cars.

Honda is already selling natural gas cars - no need for Mideast oil or refineries.

Honda will be introducing several new hybrids that make the most sense and can be driven across the USA.

PS: Ethanol for cars is a BAD idea.

Thanks for the note. We’re not sure how they came to that conclusion, but if that’s what they think, then that’s what they think.

To that end, we do have to ask if their conclusion was based on feasibility, or marketability. One of the unexplained nuances of electric cars has been ridiculous design and styling - for some reason, many manufacturers have insisted on only building go-cart sized autos, and not giving them enough power. If the car is tiny and doesn’t keep up with traffic, then no, they won’t work for most people. THERE ARE FUNCTIONAL, FULL-SIZED CARS THOUGH…..IN USE.

One of the coolest electric cars is made by Tesla Motors. It looks and performs like a sports car, and you can ‘fill it up’ just be plugging it in at night. At $109,000 it may be beyond most people’s grasps, but the price tag is paying for ’sport’ at least as much as ‘car’.

Still, if Honda is worried about the cost, that’s understandable…..but we don’t think this technology is going to stay expensive forever.

By the way, according to Tesla’s site, the cost to drive their car is 2 cents per mile. All of sudden the $109K doesn’t seem crazy considering what we’ve been paying at the pump.

Also, we agree - the current ethanol-based auto technology isn’t smart. It’s expensive and inefficient. So was gasoline at one time too though. We plan on keeping an open mind, but if the functionality and feasibility isn’t better in the near future, then something better will get the attention. Electric vehicles get our vote.

It’s not all sunshine and nice breezes, which is particularly a problem if you’re trying to produce wind and solar power. One of our readers correctly highlights that geothermal energy may be a more reliable and consistent form of alternative energy.

The wind doesn’t always blow and the sun does not always shine but geothermal energy goes on forever. I do quality audits at a major company that used a 50 acre lake to reduce energy by over 50 percent with a very short ROI.
 
Also, companies like US Geothermal are already using steam to power generators with no pollution.

Thanks. We’ve actually mentioned U.S. Geothermal (HTM) before (back in December). We found it because it looked like the stock was getting ready to move, though nothing ever really materialized. Still, an interesting idea.

One of the challenges here - as an investor - is finding companies that are doing work in the arena, but not doing other things (aka a ‘pure geothermal play’). Chevron (CVX) is actually a big name in the geothermal world, but it’s not their focus. There are geothermal-focused companies, but many are on shaky ground, undercapitalized, not profitbale, etc.

If you were interested in U.S. Geothermal, you may also be interested in Ormat Technologies (ORA). Their stock seems to be getting much more traction that HTM. In fact, Ormat may well be a solid long-term investment whether you’re a rabid geothermal fan or just an opportunity seeker.

Here’s a recent CNBC article on geothermal investing. We thought it was a pretty good take on the current state of the industry.

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This has nothing to do with investing, in micro caps or otherwise. We just thought it was worth reprinting here, since the reader who sent it in is basically right. (We’ll call it our good deed for the day.)

Why is no one in government eliminating the need for Mideast Oil? I believe the USA could do this in 2 years or less if we tried (we did nuclear bombs in less time).
 
We should:

1. Have windmills on every house (10K or less in cost)   
2. Cut down on stop and go traffic (all main city streets with no stopping for red lights once first light turns green - no left turns - 3 rights make a left)
3. Have incentives for more work at home - many jobs can be done without travel to office - at least 1 day per week - reduce rush hour - also make flex time available to everyone) - eliminate stop and go during rush hour.   
4. Promote stick shifts in cars with rebate from energy taxes - not automatics - they get a minimum of 10 percent more miles per gallon saving million of gallons of oil per year - even more with planned travel and use of neutral gears on hills.   
5. Provide rebates for fuel efficient cars.

Editor’s response: ‘Nuff said. One thing that you might find appaling….some owners are paying an extra tax on their hybrid cars. What kind of incentive is that?

If you’ve got more ideas, feel free to add ‘em below.

By the way, can a windmill - in general - power a house or even part of a house’s energy need? Anybody have that kind of knowledge tucked away? What’s the story?

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