Paul Killinger

How to Determine Value of Alternative Energy Stocks

henarl,

I didn't want the concept to sound too confusing.

And there are all kinds of solid high yielding stocks around today, not to mention terrific bond yields from going concerns. Really the opportunity of a lifetime. (Which we can use, considering the drubbing we've been through.)

Some investors believe the market is a casino, though. Say BCON triples from .70 to 2.10 (as unlikely as that may sound). Whoopee, they took all kinds of risk for a gain of 1.40 a share.

GE, on the other hand, will come back to the mid-20's or 30 in the not too distant future. (If it doesn't, we've got alot worse problems than we think ahead.) And we get paid 10% to wait. It just makes sense.

How to Determine Value of Alternative Energy Stocks

Let's see, Loren...

If you bought 4 shares of GE a week for a year, you'd have 200 shares. At $15 bucks each, that's $3,000. The dividend's another $300. If the stock doubles in three years, now you've got $6,000 plus $900 in dividends (even if you don't buy anymore). Now $6,900 for a $3,000 investment sounds pretty good to me. In fact, it's a pre-tax return of some 130%, all for $60 a week.

Beats chasing penny stocks, doesn't it?

How to Determine Value of Alternative Energy Stocks

Alright, guys, enough author bashing.

This poster is a straight forward and straight up guy. It's not his fault your investments in this arena are down 30-50%, it's the MARKET'S. Virtually all other investors are in the same boat.

Here are a couple of suggestions for you that you can choose to follow or not at your discretion.

1. If you must invest in such emerging technologies, buy a BASKET of the best stocks. You're as likely to catch the one or two real winners by themselves as you are to cash a winning lottery ticket.

2. Why not look at something more mundane like GE? It sports a 10% dividend and will be in business when all this is over. Moreover, they could buy any of these babies and not move the decimal point on their balance sheet.

3. If you need excitement, invest in gold or oil. They're both dirt cheap right now, so you'll probably double your money in a few years or less.

4. Most of all, be CAREFUL. Your odds of finding the next Microsoft are about 1 in 10,000 or less. So try to be REALISTIC. Happy hunting!

Alternative Energy Storage: It's All About Price vs. Performance

John,

You write such wonderfully organized and interesting articles. You make it a pleasure to follow the development of these important new complex technologies. Thanks again for your efforts.

Having considered the various alternatives to our energy dilemma, my own experience tells me to separate these concepts into two distinct divisions, those designed to assist electric generation and those useful for transport. I believe several of the emerging companies you identify (along with nuclear breakthroughs such as the mini-reactors produced by Hyperion Power) will assist us making the former more economic in coming years.

It is also my belief that various forms of NGV's will replace the use of some considerable amounts of oil (ie. gasoline) in our transportation sector. The main reasons for this thesis are 1) we cannot afford to abandon the 250 million ICE's already in use, 2) alternative fuels we have access to are not economic or 3) environmentally acceptable, 4) we have hundreds (or perhaps thousands) of years of supplies of methanes on hand, and 5) other substitutable alternative fuels (eg. electricity) don't work very well in practice.

Since you mentioned Boone Pickens, he has already signed contracts with Swift Trucking and Wal-Mart to replace their over the road rigs (his company provides the fueling stations) with models powered by LNG. Over time, this will significantly lessen demand for diesel fuel. Moreover, NO forms of EV's are even in the game in the future of this major sector of highway commerce.

CNG fueled vehicles, light trucks and passenger cars, are a somewhat different story. However, as there are already 7 million of them on the road throughout the world, it is only a matter of time until we catch up. GM now converts some gasoline models for free to existing customers in Germany, and conversions of most makes cost $600 US in Brazil. We can't do it here at any price (legally) due to EPA "certifications" that cost equipment manufacturers $200K per model and motor, but that's simply a regulatory roadblock which will be revised one way or another.

Assuming new NGV's are included in the realm of future federal (and state) tax credits, EV's simply can't compete at any but the very highest price points. Like you, Pickens has a saying for this, "The lowest cost energy solution wins every time."

America Must Rebuild Domestic Battery Manufacturing Infrastructure

I always enjoy your thoughtful posts, John. Thank you.

As I understand it, the two countries with large commercial deposits of lithium are China and Chile. If this is so, we may just be trading OPEC for OLEC.

And, as Boone Pickens likes to put it, "The lowest cost energy solution wins every time." That alone tells us why EV's and e-85 are certain losers in their present art forms.

NG (and coming gas hydrates) on the other hand is a sure winner. We can run our transportation economy on them for the foreseeable future.

Generating adequate electricity is a different matter. I believe the new Administration is going to ration fuel sources, thereby causing sharp increases in electric rates. The consumer blowback that follows will be interesting to see.

Recently I read something about power generation I didn't understand very well. It was a discussion about CHG (?) and the use of waste heat recovery in industrial settings to save substantial amounts of energy. Can you enlighten me?

Rising Tides in Alternative Energy Storage

John,

Is there an ETF that includes this sector?

Striking Values In the Energy Storage Sector

P.S. And the last time we tried to "force" a viable substitute for oil as a transportation fuel we ended up with e-85.

Striking Values In the Energy Storage Sector

We'll see. China is rolling out NGV conversions in a serious way, and the Israelis are converting light vehicles (ie. scooters, et al) to run on NG across Asia. No one has made a convincing case for lithium batteries to be competitive in any meaningful vehicle application as of this date. EV's are tasty, perhaps, but still so much rainbow stew.

Alternative Energy, Regular Guy Stuff and Rainbow Stew

John,

I don't run out of sophomoric questions easily (ha, ha!).

So if li-ion batteries can provide backup power for something as daunting as the electric grid, why aren't they well suited for PEV's?
(I say that as an advocate of 60 year old NGV's, and I believe in their current state of technology EV's are stupid.)

I've read about where lithium is mined (Chile and China) and that it's a relatively rare element. It would also seem to be an ideal candidate to become the basis for a new OPEC (OLEC?).

But I suspect there is more to it than that, isn't there?

Alternative Energy, Regular Guy Stuff and Rainbow Stew

That's fascinating, John. Thank you!

Alternative Energy, Regular Guy Stuff and Rainbow Stew

Thanks, John. One more "novice" question.

How exactly will power get from wind farms to actually being usable on the electric grid? I know about the use of eminent domain to attach one to the other, if you will. But as you point out, one is variable, and the other requires a steady supply.

I've seen Mr. Pickens say the problems with this technology are being resolved, and will be ready by the time the wind farms are up and running. So how would this work?

As a layman, I suppose I envision fields of huge lead acid batteries somewhere that can store the power created by the wind turbines, and send it to the power grid as required. Is this remotely the reality?

What companies are involved in trying to resolve this dilemma? Isn't this the arena in which Beacon's flywheels are partially the solution?

Thank you for your time and interest!

Alternative Energy, Regular Guy Stuff and Rainbow Stew

John,

You've become my favorite SA author. You do the best job of interpreting the prospective Rainbows for us Regular Guys. And that extends to your writing style, as well.

Would you please tell me more about the commercial energy storage prospects for BCON's flywheel technology. It appears tailor made for wind energy. Is lead-acid storage a viable competitor? Are there others? Does their technology work in the real world?

(Please excuse me if you've covered this previously. If so, would you be so kind can you direct me to such posts. Thank you.)

Energy Storage Opportunities vs. Irrational Expectations

John,

I don't know about anchors, but you are clearly one of the best posters on this fascinating financial blog. By the way, do you really live in the Alps? I would like to live somewhere as exotic, but that's WAY too cold for me.

Every time I read one of your posts, I see what you mean about the dogged li-ion types. We have a similar problem here with the Democrats in Congress. They won't even listen to facts, just the tenets of their Green religion. I feel sorry for them, as this type of thinking leads to such a narrow world view and a misunderstanding of the unlimited opportunities ahead for mankind.

Indeed, other types of energy storage devices are a can't miss investment. Like everything else, of course, you have to get in at the right time with the right one(s). Thanks for outlining and updating the field periodically for us.

In this regard, I've come across a VERY small-cap energy storage stock named Energtek, an Israeli company that has developed a technology they call ANG, which stands for their Abient Natural Gas transport storage device. Do you have any thoughts on this company?

Thanks again for sharing your work with us.

Paul