Thursday, May 15, 2008

Boone Pickens on energy

Just wanted to post this great video from Paul Kedrosky's site that has T. Boone Pickens talking about Oil, Natural Gas, Wind, Coal, Nuclear, and Ethanol. Its a long video (over an hour) but just put it on in the background while you're surfing. He brings up some interesting points. Basically, he's big on natural gas and wind. He would be big on nuclear but he says it takes too long and he's getting old haha. Also, he thinks you have to be in coal as well simply because there's such a large reliance on it. I detailed plays on all these types of energy below in my previous post.

The vid won't embed here for some reason, so here's the link to the video: Boone Pickens video

Taking profits in DRYS & more updates

Hopefully some people jumped on the bulk shipper trade I mentioned a few days back. Things have really exploded and today with DSX's earnings out, the whole sector is up 5+%. So, doing the safe thing and taking profits and leaving a little bit to run (with tight stop). Just wanted to update this trade.

Also, solar has exploded with FSLR closing above $300 so my double bottom trade in WFR went really well and I took profits in that yesterday as well. Also, unfortunately got stopped out of my CTRP a few days back but forgot to post about it. I guess that was a good thing seeing as it dropped 10% today on bad guidance on their earnings report. So, I'll have to re-evaluate that name now to pick up for longer term.

Holding CCJ long term as I really think nuclear will get a lot of attention in the coming years. Playing this through CCJ ETR EXC and then I was looking at NLR a nuclear energy ETF as well. You would be remiss NOT to have a piece of alternative energy in your portfolio simply because that's all the world is focusing on these days. Personally, I'm in natural gas with the commodity etf of UNG as well as producer CHK (huge insider buying... CEO effectively thinks the stock can double). Coal effectively is seeing great fundamentals and although I don't think of it as an energy alternative (for obvious reasons), you still need to play this boom in coal. 50% of the power generation right now is in coal... so its not going away. ACI, MEE, ANR, CNX. I'm in ACI and MEE. Then there's solar. This sector scares me a little bit solely because of the fact that so many traders are using this for a trading vehicle and the swings are pretty violent. Not to mention, the PE's have gotten pretty high and one slight miss or guide down and these things come crashing back to reality. I'm looking into possibly WFR (as an investment... I closed out my trade of it earlier), FSLR for their minimal polysilicon exposure, and I'm still doing research there so I'll post up once I come to a conclusion.

I'm of course in oil too (you have to be) but only through deepwater driller RIG. Trader Mark has a great post over on his site Fund My Mutual Fund about exactly why you want to use the deepwater drillers as your proxy to play oil. Also, PBR isn't a bad bet either.

So, in summation, you have to play alternative energy in your portfolio. I'm trying to research Wind power as well, as there don't seem to be many pure plays on this at all (turbines, power generation)... all I've really come up with is FPL.

Natural Gas: UNG, CHK
Coal: ACI, MEE
Solar: WFR FSLR ___ to be determined
Wind: ????

Thoughts on this basket I've picked out? Would love to hear arguments for or against any of the names I've selected as my energy basket.