Two weeks of absence...

Tonight I will be travelling to Asia for business and I will be away for two weeks. Chances that I will be able to find the time to post some words are minimal and therefore you are likely to see two weeks of silence. However, I will be back in time to provide you with an end of March update on my favourite stock picks, my 'green picks' and my 'mining picks'. Knowing that I might not always be able to trade in the coming two weeks, I had to rearrange my portfolio a little bit. As such, I sold Euro Ressources at a loss (1.05 (1.23)) and Yamana Gold at a profit (14.35 (9.78)). I bought BCON at $0.89, URZ at $4.48, ELR at $9.73, ORM.IE at EUR 0.185 and RNO at $3.27. I kept all my other mines in my portfolio as well as my long position in gold with an automated stoploss at $624. This might seem somewhat risky, but I am confident that gold has bottomed and that from here the direction will be upward. One thing you might have noticed is that I am adding alternative energy stocks to my portfolio. I was a previous holder of ESLR and I am still a great fan of this solar energy company. Thankfully, I sold at $15 previously and had the chance to get in at a much lower price. I expect the previous high to be taken out in 2007, but more about this when I return. Till we meet again!

A new virtual alternative energy fund is born

Everyone always aims to find the hypes in the global stock markets. In the eighties, Japan was hot. In the nineties, you had to have tech stocks. Then came metals & mining and several others have passed that may have not been as significant, but were certainly worth the money. When reading financial websites, there's one sector that keeps coming back: alternative energy. It's no secret to anyone on this planet that something needs to happen about the way we pollute the environment and our atmosphere by consuming more and more energy per capita. Emissions are a big issue, ethanol is so hot that there are actually fears of grain, corn, soy & sugar becoming too expensive for third world countries. Friends and family members might already start selling you fuel savings pills and even your little village grocer starts selling LED bulbs. Clean & green is hot and it wil remain hot for years to come, if the stock market experts are right. Well, I'm gonna take that challenge and give you five alternative energy stocks. Let's see if they can outperform my stock pick portfolio or even my mining portfolio. Here's the first five (I might add more in a while) : Evergreen Solar (ESLR - US$9.46), Beacon Power (BCON - US$0.90), Pacific Ethanol (PEIX - US$15.40), Distributed Energy Systems (DESC - US$2.89) and SolarWorld (SWV.DE - EUR 57.57). Now let's see how sunny the future is for these green stocks. Investing in these companies almost makes you feel as if you're doing something good for Mother Earth!

Solar power revisited...

One of the most beautiful examples of how a Government can almost single-handedly create an entire industry is Germany. Thanks to the so-called "Feed-in Law" in Germany, customers receive preferential tariffs for solar generated electricity depending on the nature and size of the installation. This, and several other advantages of solar power created by German Government, has led Germany to become the fastest growing photovoltaics (PV) market in the world in 2005. This trend could also be seen on the German stock exchanges, where solar power companies have emerged from the ground like mushrooms. Stocks like SolarWorld AG (FRA:SWV), Ersol Solar Energy AG (FRA:ES6) and Q-Cells AG (FRA:QCE) have all performed very well until 2004, but it was in 2005 and early 2006 when most of these companies saw the stockmarket hype end. Alternative energy lovers quickly moved from solar power to ethanol and uranium and most solar stocks have not gained much since. The reason for this was one underlying question: can solar power become efficient enough without Government aid? And consequently, the question arose whether Government should keep funding the sector. Should fossil fuel costs go up, the efficiency gap decreases and it is expected that the US solar energy market - now considered to be five years behind Germany - would then become much more competitive. Washington-based Solar Energy Industries Association (SEIA) projects that the U.S. will be the world's biggest market, with $25 billion in revenues, within five years. SolarWorld AG could be one of the companies benefiting as it focuses on delivering cost-effective technology for the end-user, helped by its strategy of vertical integration. It now is the second largest integrated solar company in the world, after Sharp. This year, sales should increase 43% to just over EUR 500 million and group profits climbed 319% to EUR 63.3 mio y/o/y in the third quarter only! With such continued strong financial performance, the stock is expected to rise again soon. SolarWorld currently trades at around 21 x earnings, which is significantly below the sector's p/e of 27. Technically, the stock looks ready to go up again and I would consider a 50% increase from its current price of EUR 46.08 realistic in 2007.