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Dear Prudent Investor,
Many people were shocked at the $350 billion bank bailout, the $22 billion auto bailout and the $787 billion economic stimulus package. But compared to global infrastructure spending, these sums are just ...
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INSIDE
- 8 Surprising Forecasts for the Infrastructure BOOM
- The Top Energy Play of the 21st Century
- 7 SuperStocks Set to Soar
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CHUMP CHANGE!
They're just down payments compared to the GOBS of money governments around the world are spending to pull the world economy back from the brink.
Whether you agree with government stimulus spending or not, you can't ignore the impact this massive spending spree could have on your portfolio.
A new report forecasts that global infrastructure needs between now and 2030 will require up to $31 TRILLION in new spending! Governments and corporations worldwide are unleashing huge sums of money to stimulate the economy, create jobs and replace aging infrastructure.
But this massive tide won't lift all boats. Some companies are in much better positions to land lucrative contracts and maximize their profits.
8 Forecasts for the Coming Infrastructure BOOM
My name is Elliott Gue. I'm editor of Personal Finance newsletter and I've been covering energy and infrastructure companies for more than 10 years. I've never seen a greater opportunity for virtually locked-in profits than I do right now. I have just completed an extensive analysis of this spending boom and the companies poised to profit.
I think you'll be surprised by these new—and sometimes controversial—forecasts about this massive spending spree and the stocks that will benefit:
Forecast #1: Carbon 'Cap and Trade' Is Dead. The election of Scott Brown to the U.S. Senate changed everything. Among other things, it makes it highly unlikely that Congress will pass a carbon cap-and-trade bill to control CO2. Instead, Congress is likely to enact a scaled-down energy bill. It will focus heavily on subsidies, tax credits and loan guarantees that can attract bi-partisan support. The big winners will be nuclear power and natural gas—more on how to profit from this seismic shift in a moment.
Forecast #2: Nuclear Energy Goes Green. President Obama has firmly embraced nuclear energy. Even environmental groups are now realizing that they must endorse nuclear as the carbon-free alternative. Governments around the world are passing laws limiting CO2 emissions. Meanwhile, demand for electrical power is expected to grow by 300% worldwide. China is building 30 new nuclear power plants and many other countries around the world are licensing new plants.
Forecast #3: The Alternative Energy Hype Won't Turn Into Profits. Don't be fooled! Alternative energy stocks are facing significant headwinds. Weak credit markets make it harder for companies to finance major wind and solar farms. In addition, the slowdown in residential construction spells a decline in household solar installations. The stimulus package's $42 billion will help at the margins but it can't offset these problems.
I warned my Personal Finance subscribers not to jump on the alternative energy bandwagon when Obama's election seemed likely, saving them from a trap that cost so many investors money. Sure, alternative energy stocks blipped up around the election, but then promptly sold off, and the sector has since underperformed.
Forecast #4: Railroads Make a Huge Comeback. Railroads have huge advantages in fuel efficiency and lower pollution. Freight rail can move a ton of freight 436 miles for one gallon of diesel fuel. High-speed passenger rail lines will take traffic off the roads and save fuel and carbon. More countries are envious of the superb rail systems in Japan. High-speed rail systems are planned for U.S. corridors. Railroad traffic is soaring and our top stock is perfectly positioned to profit—more details in a moment.
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Forecast #5: Expect a Boom in Natural Gas Acquisitions. ExxonMobil signaled the way with its $41 billion acquisition of XTO Energy on December 14, 2009. This landmark deal is a major bet on the future of natural gas. It sets the stage for a raft of future acquisitions by energy majors in 2010. This happened before when Exxon bought Mobil. Other oil companies quickly merged to keep pace. Exxon projects that natural gas demand will grow 1.8% per year through 2030—TWICE the rate of oil demand!
Forecast #6: The Market Will Love U.S. Government Gridlock. Our "broken government" may frustrate us citizens, but the stock market LOVES it. The market hates uncertainty and divided government means less uncertainty, because less is going to get done. For example, Clinton's first two years were much different from his last term in office. After he lost the Senate and the House, the divided government kept things on a more predictable course.
The possibility of new "cap-and-trade" carbon regulations keeps utilities from taking action. Should they build a somewhat clean plant or a totally clean plant? Now that the Democrats have lost their 60-vote majority, any reform that comes through is going to get watered down.
Forecast #7: Wind and Solar Development Will Be Slower Than Expected. Solar and wind power face huge challenges to work with the existing electrical grid. They require a Smart Grid that can account for variability in supply. They also need back-up capacity. For example, in Germany, every time they build a 900-megawatt wind plant, they need to build a 900-megawatt gas plant to make up for the variability. Natural gas will be the leading energy choice for power generators since it's simpler, and far less expensive. We have already pocketed some hefty profits from our natural gas plays, but I expect big things from our top natural gas play. They have their facilities working overtime to keep up with demand. Full details in your report ... learn how to download it free now.
Forecast #8: Natural Gas Becomes the Top Energy Play of the 21st Century. Natural gas emits 60% less CO2 than coal to create the same amount of electricity. Gas also emits far fewer other pollutants such as sulfur dioxide and mercury. America has an abundant supply of natural gas and it works with the existing electrical grid. This makes it the fuel of choice for electricity generators looking to build new capacity amid uncertainty over carbon and environmental regulation. The boom in natural gas will require more pipelines, processing and storage facilities which will be supported by government loan guarantees.
Super Infrastructure Stocks Set to Soar
There are huge opportunities ahead for companies that are positioned to capitalize on the forecasts I have just shared. I have uncovered seven stocks that will offer almost locked-in profit opportunities from this infrastructure boom. Let me share a few details on each and tell you how you can get the full story with a FREE copy of my new Special Report, The Global Infrastructure Boom: 7 SuperStocks Set to Soar...
SuperStock #1: The Natural Gas Innovator. New horizontal drilling and fracturing techniques are unleashing big profits for this stock. These new processes allow much more natural gas to be extracted from their huge acreage of gas fields. This company also has experience in partnering with integrated oil companies that might ultimately become acquirers—just like Exxon and XTO. Management sees an upside to as much as 62 trillion cubic feet of potential resources. The stock is a great value. In my new report, I also give you the details on their preferred shares — a 5.5% annual dividend!
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About the Author
Elliott H. Gue is editor of Personal Finance, using his knowledge of global energy markets and growth investing strategies to help investors like you profit.
A recognized expert on all things energy, Elliott appears regularly on Clean Skies TV, has also appeared on CNBC and Bloomberg TV and is a popular speaker at investment conferences.
He was also invited by the G8 Summit to provide a global outlook for alternative energy in the Summit's official treatise. The G8 named him "the world's leading energy strategist."
Prior to joining KCI Investing, Elliott lived and worked in Europe for five years, earning a bachelor's degree in economics and management and a master's degree in finance at the University of London. He was the first American student to complete a full degree at this prestigious business school.
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SuperStock #2: On Track for Huge Gains. Freight transport is the heart of today's global economy. Warren Buffett ignited interest in railroads when he acquired Burlington Northern. We have an excellent stock in this sector. It has 21,000 miles of track, primarily in the crowded eastern half of the U.S. The stock is benefiting as freight shippers switch to cheaper, faster and more efficient rail rather than trucks.
SuperStock #3: The Pipeline to Profits. This next infrastructure winner owns a mix of businesses primarily focused on natural gas. It owns pipelines to distribute natural gas and processing facilities to turn gas into even more profitable hydrocarbons, such as propane, butane and ethane. Its facilities are located in highly attractive regions near large cities. The stock trades as a Master Limited Partnership (MLP) so it also offers big tax benefits as well as high current income potential. It has maintained an impressive 9% annualized growth rate in distributions during the past five years. You don't want to miss out on this one!
You can get immediate access to my full recommendation (as well as instant access to my complete portfolio) when you accept this special invitation to try Personal Finance absolutely risk-free. Learn how.
SuperStock #4: The High-Tech Railway Leader. This next stock is an innovator in computerized electronics systems for trains. Its specialties include positive train control (PTC) systems which help trains run safer and more efficiently. PTC systems monitor a train's position relative to other trains and potential dangers. PTCs are a massive growth business because new government regulations require railroads and metro systems to install them. Freight rail giant CSX Corp. noted that it must spend $750 million on PTC systems between now and 2015. Across the industry, estimates say some $10 billion will be spent on PTC and other safety equipment. Get on board before it's too late!
SuperStock #5: Big Profits from 'the Other' Yellow Metal. Governments around the world are limiting CO2 emissions and increasing nuclear energy as a carbon-free power source. So it's no surprise that demand for uranium is expected to soar. U.S. utilities alone will need more than 260 million additional pounds between now and 2017 to keep existing reactors running. One of my top picks right now is a leading uranium producer, accounting for roughly one-fifth of global production. It produces an exceedingly high-quality "yellow cake" (20.6% uranium oxide, while some commercial mines have ore grades less than 0.5%). This gives the company a huge advantage with lower costs and higher quality.
SuperStock #6: The Global Power Play. A proven track record of winning and profitably completing large government projects gives this stock a leg up. 94% of its current backlog is with the U.S. government. Management estimates that there is $120 billion worth of opportunities related to the American Recovery and Reinvestment Act alone. But the company's growth prospects aren't solely tied to government spending.
The company has a huge division that builds nuclear and fossil fuel power plants. It is already benefiting from the emphasis on nuclear and other types of lower-carbon power. It has a 40-45% share of all maintenance and upgrades at U.S. nuclear power plants. This business is also booming as utilities look to extend the useful life of their nuclear plants. PLUS it's building 10 new nuclear power plants around the world as we speak.
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SuperStock #7: Smart Bet on the Smart Grid. Distributing electricity from wind and solar power will require an upgraded "Smart Grid" to account for variations in renewable energy supply. Meanwhile, electric utilities will already need to spend some $900 billion on their transmission and distribution infrastructure by 2030. Both these trends put this next company in the catbird seat to benefit from increased spending on the global electricity transmission infrastructure. The company sells components and systems used to build, monitor and maintain power plants and electricity transmission grids. With $5.7 billion in cash net of debt, its balance sheet is bulletproof and the company is well positioned to take advantage of acquisition opportunities.
Get full details on all these stocks in my new special report, The Global Infrastructure Boom: 7 SuperStocks Set to Soar. This report is yours FREE when you accept this invitation to try Personal Finance risk-free. In fact, it's just one of 5 bonus gifts you'll receive with our special introductory offer.
Our Track Record of Success
The last decade has not been kind to most investors. But Personal Finance subscribers are the exception. Since 2000, we've beaten the S&P 500 by 101 percentage points. We're up 63% while the S&P 500 fell 38%.
Picture yourself reviewing your investment statements and seeing gains like these:
- Peabody Energy—Up 108%!
- Shaw Group—Up 127%!
- Spectra Energy Partners—Up 42%!
- PRIMECAP Odyssey Growth—Up 44% (in just six months)!
- Matthews Asia Pacific Equity Income—Up 24%!
How to Grow Rich and Still Sleep Well Every Night
It's no secret that investors have a more challenging task than ever. With volatile markets and low interest rates, it's harder than ever to grow your nest egg without taking undue risks.
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Personal Finance covers the entire investing world with "uncommon clarity, perceptive overviews and specific recommendations." - Kiplinger's
Elliott Gue knows how to "capitalize on playing both sides of the market," finding profits whether the market is moving up or down. - Forbes
"Worth the money." - Money magazine
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Gift #1: The Global Infrastructure Boom: 7 SuperStocks Set to Soar—Global infrastructure spending will total up to $31 TRILLION over the next 20 years. No matter what the economy does, governments and corporations will need to make these investments. That's why these companies offer the best combination of low risk and high reward. A $19.95 value, yours FREE!
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Gift #3: Alternative Energy: Capitol Hill's Gift to Investors—The $787 billion American Recovery and Reinvestment Act isn't likely to be the big boost for alternative energy stocks that some pundits predict. But there is a big potential upside for companies in more established energy infrastructure companies. Here are the real winners for 2011 and beyond. A $9.95 value, yours FREE!
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