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Obama's Infrastructure Plan

Make the New Stimulus Your Stimulus

Written by Nick Hodge
Posted December 12, 2008

It's been like waiting to see who got the next golden ticket.

With cabinet positions quickly disappearing, those of us with energy close to our hearts have been waiting with bated breath to see who would fill the position of energy secretary.

Who would get this treasured ticket? An amicable fellow (or lady), wise to the serious energy challenges ahead, and ready to take them on—the Charlie Bucket of the day? Or an insider, wise only to politicking and leveraging policy to placate lobbyists—the Veruca Salt or, even worse, energy's Arthur Slugworth.

The answer came a few days ago and, so far, the reception has been warm, particularly from the green community.

Obama, A New Energy Secretary, and Renewable Energy

Obama's choice for energy secretary, Steven Chu, was a relatively unknown to most people.

But he could be just the man to shake up the D.C. energy scene, and finally commit to firm renewable energy targets and initiatives on a nationwide scale, instead of piecemeal at the state level.

He's a Nobel physics laureate and the head of the Lawrence Berkeley National Laboratory, where he's been developing new alternative energy technologies.

His strong background in renewables, and scant experience with fossil fuels, signals a sea change is coming to energy policy. And a shift in Washington's focus may means it's time to shift your energy investing strategy as well.

Instead of an entrenched bureaucrat in the position—as has been the case with several recent holders of the position—content with business as usual politics and policy, Chu comes to the table with technical know-how and roots in cleantech advocacy.

And he's going to begin implementing Obama's infrastructure plan, including steps to establish a  green economy, on day one.

But Chu isn't going to be tackling this problem alone. He is only one of the foot soldiers in the new energy army.

Obama has also tapped Carol Browner, a former legislative director for Al Gore, to act as energy czar, overseeing energy, environmental, and climate policy. Renewable energy proponent Bill Richardson is also in the cabinet as commerce secretary.

What's more, the new administration is leveraging the current state of the economy to justify this new energy agenda by tying economic reforms to new energy and infrastructure spending.

This is where it gets interesting for investors.

Because the Democratic-controlled congress has so far seemed more than willing fund all these measures. And big government spending concentrated on specific market sectors always leads to higher stock valuations.

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In fact, Congress is already pushing through a new stimulus—with a price tag already topping out at $500 billion—focused on energy infrastructure spending and job creation, to be signed immediately after the inauguration.

Turning the New Stimulus into Your Stimulus

By being in the know, you can leverage the soon-to-come spending into profits for your portfolio.

And it couldn't come at a better time.

As the stock market bottoms, now is a great time to get back into some surefire plays.

With the financial waters still only lukewarm, betting on the same plays at the government is a smart way to reenter the market.

The first place to look—and this has been harped on a lot lately—is stalwart infrastructure stocks that have been swept up in broad market sell-off but that are ready to run once again.

I'm talking about blue chips here like:

  • Fluor Corp. (NYSE: FLR), down 45% for the year

  • EMCOR Group Inc. (NYSE: EME), down 35% for the year

  • Foster Wheeler Ltd. (NASDAQ: FWLT), down 65% for the year

  • Caterpillar Inc. (NYSE: CAT), down 45% for the year

  • Jacobs Engineering (NYSE: JEC), down 45% for the year

All these major construction and infrastructure companies are going to be tapped to build out the projects about to be authorized when the new president takes office, like grid infrastructure upgrades and solar and wind farms.

I've done extensive research on this sector, and all indicators lead me to believe that infrastructure stocks bottomed in late February, when Mr. Obama's policy goals became clear.

Since then, these stocks have made extraordinary runs, picking up 25% or more in most cases in just the last two weeks.

Here's the chart:

infrastructure stocks

But this is just the beginning; a preamble to the great infrastructure bull about to ensue.

And even with their gains over the past few weeks, this group of stocks still isn't close to returning to levels seen earlier this year.

Rest assured, those levels will return, and then some. Fortunes stand to be made in the process.

Thousands of readers of my Alternative Energy Speculator are already positioned in several stocks that will benefit from this boom.

Now, with the downward pressure being stoked by failing auto bailout talks, an opportunity has emerged to make new recommendations in the infrastructure sector.

I don't want you to miss them.

For that reason, I'm offering a special 60% discount off the one-year price of the Alternative Energy Speculator, specifically for this infrastructure opportunity.

To learn more about it, click here. When the profits start rolling in, you'll be glad you did.

Call it like you see it,

nick hodge

Nick

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