Welcome to Energy and Capital's new weekend review. Each week we'll take a look at the week that was and what's ahead, along with what you may have missed from our free sister sites, Wealth Daily, Gold World, and our free blogs. Enjoy.
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It was December 21 when we last spoke of Cree (CREE:NASDAQ) benefiting from the 2012 100-watt incandescent bulb ban announcement. Since then the stock has run from a $22 low to more than $35 - a 59% move that Pure Energy Trader readers benefited handsomely from with the underlying stock. And the Cree June 2008 25 calls gained more than 310% at one point.
But my purpose isn't to show off Pure Energy Trader gains. It's to inform you that the recent pullback sub-$29 is a prime buying opportunity.
Sure, the naysayers would have you believe the LED run is over. But we're talking about a market with 388% growth potential. This is a market expected to exceed $1 billion by 2011, a 388% jump from a 2005 market value of $205 million.
And we're not the only ones that see the potential here.
- Walt Disney World has changed over to LED, wiring Cinderella's Castle with more than 20,000 LEDs and saving thousands of dollars.
- The Times Square ball was lit with LED lighting, making it twice as bright and using half the energy.
- The city of Boulder, Colorado, has switched to LEDs for its Downtown Pearl Street Mall.
- Royal Philips Electronics is aware of the potential, announcing it was buying Genlyte for $2.7 billion as part of its LED company buying spree as it strengthens is energy-efficient lighting business.
- London has launched an attempt to "become the first city in the world to be lit by LEDs . . . the city aims to install LEDs in all its streets within five years."
Even venture capitalists are lining up for a piece of the LED market, says the Wall Street Journal. "Many venture capitalists are touting the energy efficiencies of next-generation lighting, including start-ups using light-emitting diode, or LED, technology. LEDs, though more expensive than incandescent bulbs or fluorescent tubes, draw much less power, last for many years and contain few materials that are harmful to the environment."
Sure, the bulbs may be expensive to buy, but there are long-term cost benefits. When the President's plan to fully phase out 100-watt incandescent bulbs is realized, there'll be a switch to bulbs using 25% to 30% less energy. That alone could lop an estimated $18 billion off annual U.S. energy bills - a boon for companies like Cree.
Who knows, maybe all this will put pressure on GE to buy a company like Cree. Would it be a shock if a company wanting to guarantee a supply of LEDs came forward and paid Cree what it is worth?
The growth is there, my friends. You just have to pick up LED-related stocks early and cheaply enough before the Internet-type run begins.
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For the week of March 17, 2008, here's what we covered in Energy and Capital and elsewhere.
Oil Drilling in the ANWR: Can Arctic Oil Satisfy U.S. Demand?
Although attempts to drill in the Arctic National Wildlife Refuge (ANWR) have failed in the past, another piece of legislation has reached the U.S. Senate to tap its resources. This time, drilling would be permitted if oil prices reach $125 a barrel.
Canadian Oil Production: Setting Up for a Flood of Canadian Oil
When we're talking about Canadian crude flowing to the U.S., there are two specific places investors should focus on. Over the next few years, nearly three million barrels of oil per day from the Alberta oil sands will be flowing into the U.S. (Canada estimates production will reach 2.7 million barrels per day by 2015). Granted, extracting and upgrading the heavy bitumen is an energy-intensive process. But as technology improves, that process will become more efficient. Believe me, if companies were able to stay around throughout $20/bbl oil, they'll thrive when oil hits $120 a barrel.
Clean Energy Technology: Why Bill Gates Is Missing the Green Point
Bill Gates knows that Microsoft is an international company, and he knows he needs Congress's help. But as he meets with D.C. insiders this week, Gates is emphasizing more work visas for infotech geniuses, overlooking the key to Silicon Valley's continuing prosperity--clean energy technology.
And The Fifth Top Economic Advisor Is: They're Kidding, Right?
Yep, if you read today's news, you were as shocked as I was. USA Today is recognizing Lawrence Yun for his "economic forecast accuracy."
Gold Takes a Header: Commodities Spend the Day in the Red
With the stunning collapse of Bear Stearns and the Fed's latest move to include investment banks under its umbrella, a total systemic financial collapse has now likely been averted. And with the latest Fed statement ratcheting up the tough talk on inflation, the dollar may now be close to the point where it will actually be defended.
The Bear Stearns Collapse: Fifth Largest Bank Bought for $2 . . . Who's Next?
"Ian, I'm holding a long position in Bear Stearns, and am a bit put off by your recommendation to avoid it along with other banking institutions. The CEO just said the company was okay, and Jim Cramer said, ‘Bear Stearns is not in trouble. If anything, they're more likely to be taken over. Don't move your money from Bear.' What do you have to say about that, tough guy?"
The Bear Stearns Meltdown: Meltdown, Schmeltdown, It's Time to Go Long
The Bear Stearns meltdown wasn't the beginning of the end, but the end of the beginning. The next phase, in all likelihood, would be a market that would begin to regain its footing. The Bernanke playbook, in other words, was hitting its final strides.
MF Global Stock: After Bear Stearns News, One Financial Jets 60% Higher
It was 2001 when severe political and economic crises stripped 50% off the Turkish lira as hundreds lost their jobs. But had you bought the "crisis" opportunity, buying shares of strong but beaten-down companies, you'd have made a small fortune. Turkcell, for example, plunged from $24 to $1.50, only to recover to $16.52 following the crisis.
That's it for this week. For more, visit your free EnergyandCapital.com, GoldWorld.com, and WealthDaily.com.
Have a great weekend,
Ian L. Cooper
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