Bruce Pile

Gasoline Prices: A Retail Headwind

I don't know if its related to a return of rising gasoline prices, but there seems to be something cooking with the "alternative gasoline" stocks lately. Alternative gasoline is sugar cane ethanol (not the worthless corn stuff) and nat gas.

As of mid 2006, what was the #1 investment of the previous 15 years, yet given away for free at every restaurant? Sugar! Back then, Jim Rogers was quoted as saying, "Sugar could quadruple from here and it would still be below its all-time high. The rally hasn't even started yet". And last year at an investment conference, he said "buy all the sugar you can". Sugar got hit by the market decline like everything else, but is now staging a vigorous return to Rogers' rally (check out SGG, the sugar ETF, and IPSU CZZ).

The price of nat gas isn't all that vigorous, but the nat gas stock index XNG is out performing all the major indexes, even the Nasdaq YTD. And the nat-gas-as-auto-fuel stocks are going plum crazy (check FSYS CLNE).

All of this is explained in part by the general market rally, but the alternative gasoline theme appears to be jumping with more gusto than the market and may continue after the market flattens out. Coal and CTL auto fuels are not left out of the picture either (check HW SYNM).

Hopefully, the Obama administration is working to get these fuels going and preparing to ditch the moronic corn squeezin's. There is a bill being prepared for Congress called The Nat Gas Act of 2009 with a bunch of rabble rousers organizing a "Virtual March on Washington" on the net where you can sign your name to a letter of support for the bill and even add your own message. You fill in your info with zip code, and the letter is emailed to your local representation in Congress and to Obama's office. I sent one and gave the president an earfull. You can too if you want nat gas as an alternative fuel; just google "Virtual March on Washington".