Mad Hedge Fund Trader

Better Lithium-Ion Battery Plays than A123 Systems

rti The spectacular debut of the IPO for A123 Systems (AONE), a maker of high powered, quick recharging lithium ion phosphate batteries using advanced nanophoshate technology, put a great shining spotlight on a sector I have been harping about all year (search my data base for “Butch Cassidy” by clicking here at www.madhedgefundtrader... ). The initial price talk was at $8, the IPO came out at $13.50, and the first day of trading took it up to a meteoric 43% to $19.20 on the first day! I had a flashback to the dot.com boom. Where are the gold flecks on the sushi, my free IPO hat, and the vodka luge? The fact is that this is an industry that is going to be huge in the next 20 years. The market for lithium ion batteries, which offer a 4X improvement over ferrous oxide predecessors in energy stored per unit of weight, is expected to grow from $32 million this year, to $74 billion by 2020. That is no typo; I really did leap from millions to billions. Their use is expected to spread from cell phones, to the electric car industry, to endless other applications. We are still in the ground floor elevator of the Empire State building. But outside of a few stocks like Chile’s Sociedad Quimica Y Minera (SQM), there have been few ways in which an investor can get involved in the lithium space (see my call to buy the stock in February before its healthy 60% move up at www.madhedgefundtrader... ). So when a small company like A123 opens a window, the investors dog pile in. Watch this space. Lithium could be the new crude, and companies like A123 could become the next Exxon (if Exxon doesn’t become the next Exxon). Kiss up to your long neglected broker and try to get in on the next allocation.