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While everyone is focused on the soaring price of a barrel of oil, another conventional energy sector has entered its very own stealth bull market. Well, it can be called a "stealth" bull market only if you were so distracted by the daily headlines you forgot to read between the lines. Watch today's Rant to learn where you should invest to collect some easy money in a difficult market. And don't miss today's "Ask Toby" section to get my view on green energy ETFs. Toby | |||
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Watch a video of today's rant. In this tough market, ChangeWave Investing subscribers have made big profits buying small-cap energy exploration players that are going after new deposits of oil and natural gas. If you're not in on these plays, you're probably not making much money in this market. It's not too late for you to get in the game, but there are some things you must understand. First and foremost, are oil and natural gas prices a function of speculation or demand? With the long-only pension money chasing energy investments at 20 times the rate it was eight years ago -- that's 2,000% more dough in oil and natural gas investments -- what we really have is a supply/demand imbalance for oil and natural gas derivatives. These long-only pension funds dedicate huge amounts of money to index funds, which they then must hold. But fundamentals count, too. Here's an interesting statistic regarding the barrels of oil used per citizen per country each year: * United States -- 25 China is stockpiling oil for the upcoming Olympics, which is affecting demand in the short term. More importantly, though, India and China combined are adding 20,000 to 25,000 new automobiles to their roadways per day, so the demand curve is rising faster than the destruction curve (i.e., Americans trading in their gas-guzzling SUVs). The Other Side of Energy But, while everyone is complaining about the price of oil, many people don't realize that natural gas prices have risen 82% in the past 12 months. The natural gas situation is a little easier to understand than the oil situation. It boils down to weather and liquefied natural gas (LNG) competition. The cold winter we had -- the first "normal" one in about eight years -- took natural gas storage under its five-year average by about 15%. Now, with the warm summer we're having, natural gas is being taken out of storage at record rates to generate electricity. If you price natural gas in British thermal units (BTUs) relative to oil, today's price would be around $22. And we may very well see that price before the end of summer -- it would only take one major hurricane in the Gulf of Mexico. That's how close we are to $20 natural gas. In addition to the weather, there is the issue of liquefied natural gas competition. U.S. natural gas prices were supposed to drop as we increased LNG imports and built new depositories. But LNG imports in the United States are down 70% this year. How can that be? It's simple: We're getting outbid. Other countries are paying $18 per thousand cubic feet (Mcf) for natural gas arriving via LNG ships. Europe is importing more natural gas due to weather and the depletion of natural gas reserves in the North Sea. It's a similar story in Japan. For example, Spain had very little rainfall this year, so its hydroelectric power generation is off by about 10%. It makes up for that shortfall with natural gas. Bear in mind that U.S. natural gas production is up about 7% year-over-year. New discoveries and drilling techniques are contributing to this, and if we have a very mild summer, then we may see some retrenchment. But the key point here is that natural gas is now a fungible global commodity. We must compete with the rest of the world for liquefied natural gas, just like we do for oil. At ChangeWave Investing, we're going to continue to make huge profits from our oil and natural gas exploration and production plays. (Learn more.) These are companies that can add 20%-plus in new reserves each year and grow production. In this type of pricing environment, these stocks will explode in value. Now is the time to get in the game!
Toby P.S. Energy prices are skyrocketing, and investors in the right areas are making a fortune. But, if you're only investing in oil, then you might be leaving half the profits on the table. Join ChangeWave Investing today to get the names of the best emerging oil and natural gas plays. | |||
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Answers to Your Options Questions Options are a perfect way to leverage your money and make great profits, and one of the best resources available is the OptionsZone Insider. This free e-letter is full of trading ideas and strategies straight from the pros that can be used immediately to increase your trading edge. Don't wait. Your finances will thank you. Sign up today for your free subscription. | |||
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In today's video, Toby discusses three alternative energy exchange-traded funds he likes right now. | |||
Be sure to tune in to Fox News Channel this weekend and join Toby and the crew on "Bulls & Bears" for their weekly market roundtable as they kick off the Fox News Channel business block on Saturday, June 28, at 10 a.m. Eastern. ("Bulls & Bears" replays at 4 p.m. Eastern, Sunday, June 29, and 4 a.m. Eastern, Monday, June 30.) Or you can catch the show Saturday evenings at 6 p.m. Eastern on the new Fox Business Network. Check your local cable listings or satellite guide to find the Fox News Channel location and times for your area. NOTE: These shows are NOT on your local Fox network station. They are on Fox News Channel on your cable or satellite system (Channel 360 on DirecTV, Channel 205 on Dish Network). Keep in mind that these schedules are subject to change, and the Fox News Channel business block and other programming may be pre-empted for breaking news events. | |||
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Making Money 101 The best way to make money is to buy dominant growth stocks at bargain prices. Level-headed investors know that this bear market will end and the big winners will be those who got in at rock-bottom prices. I have five tech stocks that could double your money or better during the next 12-18 months. | |||
 Wine Find: Lovely Lopez The "anti-Parker" movement is gaining speed on the Internet. Robert Parker is considered a wine guru, but the problem with his rating system is that he scores only according to his own taste. Apparently not everyone shares that taste, as I'm seeing more and more "Parker sucks" e-mails and blog posts these days. Consultants like Michel Rolland, who help winemakers shape "Parker-worthy" wines, tend to lean toward using more sulfur to kill off natural airborne yeasts to speed up fermentation. And many times they substitute their own yeasts, which changes the way the wines ferment and develop. If you've ever gotten a headache from or had a bad reaction to a red wine, chances are you're reacting to the sulfites. Lopez de Heredia Vina Tondonia Gran Reserva is not a Parker favorite, and I just love it. This vino shouldn't give you a headache (unless, of course, you drink the whole bottle). Depending on the vintage, it retails for about $75 per bottle. It is an old-style Tempranillo from the Rioja region of Spain that goes great with spicy food and, of course, paella. We will visit this winery when we head to Spain for the Wine, Dine and Stocks Seminar in October. There's just one slot left, so check out the details at www.changewaveseminars.com and sign up quickly. And, my friends, remember to pass a good thing forward. If you enjoy my weekly wine tips, don't forget to send in your own spectacular finds! To share your favorite wine or food experience, e-mail me through the form at: www.changewave.com. | |||
| Join ChangeWave at the San Francisco Money Show Ignite your portfolio and boost your investment savvy at this four-day event filled with opportunities for you to gain profitable insights and advice. Join us in the heart of downtown San Francisco, Aug. 7-10, at the San Francisco Marriott. Don't wait. Accept your free tickets today. | |||
