Long Term Trends: Part 1: Energy, Oil, Coal, Nuclear, Cleanup

Forever Portfolio Series

James Altucher, of TheStreet.com and Stockpickr.com, is writing a book: The Forever Portfolio: How to Pick Stocks That You Can Hold for the Long Run.

James Altucher hopes to show investors how to build a strong, consistent long-term portfolio, diversified enough to withstand the various cycles of the market.

Inspired by this, we will be starting a series over a period of time highlighting some long term trends. Some of the trends may be working right now, but some of them may start several years from now but last a long time.

Energy

Energy is a long term trend. Oil price is zooming. Demand will be increasing over the long term as countries all around the world, especially those countries in the emerging markets (such as China and India) demand more energy and oil.

Supply will remain limited, and rising energy prices (or consistently expensive energy prices) will remain a long term trend.

Integrated Oil Companies

Some integrated Oil Companies to look at:

1. Exxon Mobil (XOM)
   
2. Conoco Philips (COP)
   
3. CNOOC (CEO), Chinese Oil Company
   
4. Petro China (PTR), Chinese Oil Company
   
5. Petrobras Energia (PZE), South American Oil Company
   
6. Lukoil (LUKOY.PK), Russian Oil Company
   

Oil Services and Exploration

Oil companies need help searching for new oil, drilling, extracting oil from oil sands, and all other forms of help. Some of these oil services companies could benefit.

1. Schlumberger (SLB)
   
2. Halliburton (HAL)
   
3. Transocean (RIG)
   
4. National Oilwell Varco (NOV)
   
5. Nabors (NBR)
   
6. Ensco International (ESV)
   
7. Petroleo Brasileiro (PBR)
   

Canadian Oil Sands and Other Energy

Canada has the Largest Crude Oil Reserve, but much of it is in Canadian Oil Sands, which can be difficult to extract, but becomes profitable as energy prices remain high.

1. Suncor (SU)
   
2. Canadian Natural Resources (CNQ)
   

Natural Gas

As oil zooms higher, other forms of energy resources are needed and this incldues Natural Gas.

1. Chesapeake Energy (CHK)
   
2. Canadian Natural Resources (CNQ)
3. Andarko Petroleum (APC)
   
4. Encana (ECA)
   
5. Devon (DVN)
   
6. Apache (APA)
   

Oil and Gas Pipelines

Gas and Oil needs to transported.

1. Williams Co (WMB)
   
2. Spectra Energy (SE)
   
3. Enbridge (ENB)
   
4. Kinder Morgan Energy (KMP)
   
5. El Paso Coroporation (EP)
   

Refinery

Oil needs to be refined.

1. Valero (VLO)
   
2. Marathon Oil (MRO)
   
3. Sunoco (SUN)
   

Oil Shipping

Oil needs to be shipped all around the world.

1. Frontline Ltd (FRO)
   
2. Nordic American Tanker Shipping (NAT)
   
3. Overseas Shipholding Group (OSG)
   
4. Teekay (TK)
   

Coal

Coal is one of the most inexpensive forms of fossil fuel. Some people complain about the environmental implications. There are new technologies out there.

1. Peabody Energy (BTU)

Coal Services

1. Bucyrus (BUCY)
   
2. Joy Global (JOYG)
   

Railroads for Coal

Railroads are needed to transport energy products such as coal:

1. Union Pacific Railroad (UP)
   
2. CSX Transportation (CSXT)
   
3. Norfolk Southern Railway (NS)
   

Nuclear

Nuclear can provide a lot of energy for very long time, but detractors do not like the environmental implications.

1. Cameco (CCJ)

Environmental Cleanup including Nuclear

With all these byproducts, the environment needs to be cleaned up.

1. American Ecology (ECOL)
   
2. Clean Harbors (CLHB)
   
3. Energy Solutions (ES)
   

Alternative Energy

Alternative Energy is still a very speculative area, but if you wish to research, you may. Alternative energy includes ethanol, bio-fuels, solar, wind, and even wave power. As of this moment, more funding will be put in alternative energies in a world where energy prices are zooming too high. Students and researchers will be researching new and more profitable ways to provide energy.

1. First Solar (FSLR), A Solar company
   
2. Any Agriculture Company
   
3. Energy Conversion Devices (ENER)
   
4. Imperial Sugar (IPSU), another source of ethanol
   
5. Toyota Motors (TM), a leading hybrid engine car company
   

Investor Sentiment During the 4% Market Correction

Stockpickr.com brings social networking to the investing world. It is now currently owned by the Financial site TheStreet.com . Stockpickr has many features, but one of its interesting features is the Answers Section where any member can post questions, and anyone can answer, including Jim Cramer or James Altucher, the main founder of the site.

We can also use it to gauge what the average investor is thinking.

Recently, we had a 3.5% drop in the S&P 500. I've selectively chosen a few Answer Threads from Stockpickr to illustrate what the average person is thinking during this drop:

Ordered in Reverse time order:

1. "All right, now that we've had the weekend to step away from the markets and allow for last
week's action to digest ... anyone have any
thoughts on what's in store for tomorrow
morning?" Asked by Thomas Nunn

2. "Thursday am I sold off 95% of my stocks and
locked in my gains. I did nothing Friday 6/8,
only to see the DOW jump 130 pts. Do you think
we've hit bottom yet, or will there be another
substantial pullback?" Asked by John Kuhnemund

3. "Jim,
What did I do wrong in not knowing ahead of
time that a correction in the market was ready
to hit? I know there were warnings on TV (CNBC
of course) and in the papers. I also know the
momentum in the market could not go on forever.
I know investors need to "Expect corrections..."
What technical indicators do you look at and
keep a close eye on to show the market is ready
to head south? Thanks." Asked by cnyguy

4. "Do you guys think we are out of the woods yet
with this correction?" Asked by gtz550

5. " Hey Jim and James,
More so then ever I am scared of staying in the
game. I lost a big % in the past few days. How
much longer do you predict that this ugliness
will continue? Is this the summer selloff?
You've always been my cheerleader Jim. I could
sure use a morale boost. Frank from Philly" --
Asked by Francesco the kid


There's more of this. Maybe in another post.

The New Four Horsemen of Tech

In CNBC's Mad Money show on June 6, 2007, Jim Cramer chooses the Four NEW Horsemen of Tech:
1. Google (GOOG)
2. Amazon (AMZN)
3. Apple (AAPL)
4. Research in Motion (RIMM)

Google and Apple are two obvious choices. At the minimum, those two selections will definitely lead the Tech Market over the next decade or so.

Very interesting discussion on Stockpickr.com : Tech Corner

I like the Idea of AmazonBay, the merger of Amazon (AMZN) and Ebay (EBAY). Ebay has a monopoly on the internet used product and collectible market. Amazon has a monopoly on the new and commodized internet retailing market such as books and DVDs. Together, they would create a monster of an internet retailing dominating almost all segments of internet retailing. Amazon can get rid of their Used Amazon Marketplace in place of Ebay. Amazon can also get rid of their customer rating system in favor of Ebay's. Ebay even comes with Paypal. AmazonBay would be a very exciting company to own stock in.