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Suck it up and learn how to profit from it

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November 06, 2008 – Comments (7) | RELATED TICKERS: FPL.DL2 , EXC

 

I'm getting tired of all of the whining in blog posts and from the right about how Obama was elected President and how we're all screwed.  Did I vote for him?  No.  But I didn't vote for McCain either.  I am not going to sit here and cry that I didn't like the candidates who were running for our country's highest office.  It is what it is.  I am going to suck it up and try to figure out how to profit from the change in administration and the natural policy changes that will come as a result of it.  The whiners should too.

I plan to write a few posts on the sectors I believe the new administration will benefit over the next several days.

Investment Idea #1: Clean Power Generation

The Democrats have said that they want to make long-term investments in clean energy.  Specifically, Obama has proposed that the U.S. invest as much as $150 billion in renewable energy over the next 10 years.  He also wants to require 10% of the United States power come from renewable sources by the year 2013.  Furthermore, in an effort to eliminate greenhouse gases, Obama has stated that ht favors using a cap-and-trade auction to limit companies carbon emissions, with the goal of reducing the country's carbon emissions by 80% from their 1999 level by the year 2050.

If these things come to pass, all of them will benefit power companies like FPL and Exelon, which have a large presence in wind and nuclear power.  As an added bonus, both of these companies mesh nicely with my strategy of purchasing stocks that pay solid dividends (3.9%).

As an added bonus, Obama has stated that he intends to support plug-in electric vehicles by doubling automakers' fuel economy standards, offering a $7,000 tax credit to buyers of such vehicles, provide $4 billion in retooling credits and loans to help domestic automakers produce new, fuel efficient vehicles, and aim to get 1 million 150 mile-per-gallon plug-in hybrids on the roads within six years.  The increased demand for electricity that plug-in electric vehicles would stimulate would be bullish for power companies as well.

Sources: Gas Prices & What Obama stands for on economy

Deej

Long FPL & EXC

7 Comments – Post Your Own

#1) On November 06, 2008 at 11:51 AM, MadRussianHobbit (95.16) wrote:

Thanks for the kick in the pants to those who (like me) didn't vote for Obama but (unlike me) are now joining the End of the World Club.  It will take a lot of work for the new administration to destroy the United States Economy.  (Yes, the old administration gave them a great start, but still.....)

I'm not so sure about the alternative energy play.  Obama's first priority is going to be turning the economy around as quickly as possible.  Alternative energy may not be the fastest way to do it.

Then comes the timing of the mid-term elections.  Depending on the decisions he makes during his first year in office, he will either become the next Clinton (massive GOP take back of the House and Senate) or the Glorious Leader in a Brave New (green?) World.  Unless he can really turn the economy around quickly, I wouldn't expect much to happen to the alternative energy sector until the mid-term elections validate his view of america.

As for FPL, again there's a timing issue.  The Florida economy has been hit hard, and local economists don't expect any sort of significant growth for at least a year.  So I wouldn't be expecting growth in Florida for a year.

Long term however, that may be a very smart play.  It is far cheaper to aircondition a house than to heat it.  As energy costs increase (which they will under an alternative energy future), there will be economic incentives to move south away from the fridgid north.  Global Warming, even under the most radical scenarios, won't significantly change heating and air conditioning costs for decades - far longer than most investor's horizons.

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#2) On November 06, 2008 at 12:16 PM, LordZ wrote:

Tell that to the guy whos getting his face pounded into the cold bloody wet floor, just tell him, oh its not so bad, just suck it up man, hopefully you'll soon pass out and you won't mind the beating, heck, maybe if your really lucky, you won't wake up to a pool of your own blood///

 

Imagines that screen in that Jet Li movie where hes a chines cop who goes to France, where the head of the police is in some chinese restaurant and he is mopping the floor with some chinese guy and they drag him away, blood abounds...

 

Its all easy, until its your blood.

 

All I can say, is forget what you know or what you think you know... because you really dont know....

Until its your blood, and you somehow get up and feel that beating on your face, you look to smile, but it somehow has been wiped out by some well placed blows...

So when the next time someone ask ya head or gut...

you had better run.. before you get hit in the gut and than knocked out in the head...

 

LORD Z

bleeding on the floor..

 

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#3) On November 06, 2008 at 12:29 PM, Tastylunch (29.41) wrote:

No pain No gain!

I pity the fool that don't invest in clean energy!

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#4) On November 06, 2008 at 1:20 PM, FleaBagger (28.07) wrote:

I'm a conservative who didn't vote for McCain. Maybe he would have been significantly better than Obama (who I'm pretty sure will be a disaster), but I don't think so. I knew in March we were in for economic pain, not just from housing, but for four more years.

Did I stop investing? No. Buying in a secular bear market is the tuition I'm paying to attend Wall Street University's School of Investing. This is how I learn. I'm learning to love writing covered calls. It sure takes the edge off waiting for my stocks to come back up.

I personally like silver better than solar for the next 2-3 years.

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#5) On November 06, 2008 at 2:16 PM, TMFDeej (99.24) wrote:

LordZ, here's what I would tell the gentleman who as you so articulately put it "whos [sic] getting his face pounded into the cold bloody wet floor" to stop being such a pussy, get up, and fight back.

Good point about environmental issues being pushed to the back burner by the current economic problems.  The clean energy trade may take a while to pan out, but I strongly believe that it eventually will.  We can use the pain in the meantime to accumulate shares of solid companies like these on the cheap.

Deej

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#6) On November 07, 2008 at 9:04 AM, givmeabreak (28.82) wrote:

How is he gonna power all those electric cars if he wants to end the coal industry, which is where we get 1/2 of all our power?

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#7) On November 07, 2008 at 10:46 AM, LordZ wrote:

We dont need electricity we can simply power them based upon promises of change...

I can see it now flintstone light cars which people, push or pull..

Maybe we put a bike in front and have some highly paid government employee pull your fat butts around...

The Audacity of BULL

and the stealin of hope...

 

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