Picking the Right Horses from the Stimulus Package

Woke up to my good friend Dr. Tan's Facebook status that he's considering alternative investment strategies. Hey, when a professor of finance expresses interest in the alternative energy sector, it's usually silly not to at least listen.

I must say I've never been a stock market player, 1) because I don't have the money 2) I didn't spend enough time researching companies and how they fared 3) didn't know enough about what strategies leading companies have that set them apart from the peers 4) pure laziness. I mean, back in 1998 I KNEW about Google. I knew it was gonna be huge too because it combined all the search results of all the other search engines available then and was just superior. But I didn't act....

Situation now is that I know Obama's stimulus package is gonna lead to winners. I know large-scale wind and solar will take off. I know the companies that win the contracts to implement a distributed grid will take off - especially the software companies (someone say Microsoft?). This time I will act, and not make the Google mistake.

This morning's article that the US Climate Change bill is coming sooner than expected, is therefore good news for me.

This is not to say that any investment in the alternatives sector is any less risky than other sectors. As the potential gains are unimaginable, the potential losses are huge too. Only the best survives and if you back the wrong horse, bad luck. For example, it's still not looking particularly rosy in the solar sector with projects being postponed or canceled due to the credit crunch. Even projects that appear to make perfect sense such as large scale concentrating solar power in the Californian deserts. Basically, banks are unwilling to lend to any high capital investment projects in these tight times, unless it's a sure bet and the project manager is warren buffet (you get my point). Wind is facing a similar problem but such is the growth of the market in the US, it recently took over from Germany as the world largest installer. As the stimulus package is passed and the market slowly recovers (dangerous assumption I know), it's a good bet that US wind capacity will increase at least 50% per year for the next 5 years.

A source of good information regarding cleantech stocks can be found here. Though my knowledge is still shallow, I do fancy the likes of Accione and Vestas....now it's about the timing ; p