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The same Fortune interview with Jim Rogers, which I referenced last week also contains an excerpt from his new book, A Bull in China. In it, he goes over a few stock picks, including one I thought worth bringing to the attention of investors interested in profiting from rising CAFE standards and other increases in vehicle efficiency: Jim says:

Aluminum Corp. of China (Chalco) (ACH). Three year trend: profits up 86.7%, revenues up 88.8%. Chalco is the largest producer of primary aluminum in the world's fastest-growing aluminum market. Established in 1999 out of state-owned firms, this No. 2 aluminum manufacturer in the world is reported to be planning aggressive acquisitions, including a possible takeover bid for Alcoa (AA). While some new plants are being built, others in China have been closing due to the high electricity costs. But world demand for this commodity continues to grow.

As petroleum becomes increasingly expensive, there will be an increasing push to improve vehicle efficiency. One of the simplest and most cost effective ways to do this is to incorporate more aluminum, as I argued in this article about Alcoa.

I've long been leery about investing in Chinese firms, because I have serious doubts about Chinese commitment to shareholder rights and disclosure, although these may be improving. Nevertheless, my respect for Jim Rogers has peaked my interest, both in the stock and in his latest book.

DISCLOSURE: Tom Konrad and his clients have positions in AA.

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This article has 2 comments:

  •  
    Nobody is correct 100% of the time. Not even Jim Rogers. There are other ways to play the metals that are USA or Canadian based and should do very well. I would not invest in a Chinese based stock at this time.
    2007 Dec 24 12:34 PM | Link | Reply
  •  
    Why u thinking not to invest in china titles ? the stock ran very well last 12 months.nevertheless, there are ppl talking about a gap in China´s Aluminium resources.I ask that, because i bought many pieces from that title and i really worry now. in August it ran very well and i still hold them, expecting the boom will carry on. Thangs in advance for a helpful reply ! ;) bth happy new and successful yera
    2008 Jan 07 05:46 PM | Link | Reply