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The Crude Oil Short Squeeze

Crude oil prices are very volitale right now and trying to pick to the top is not easy. According to an energy analyst at Citigroup, "it may be the time to short oil, but then again, it may not."

A lot of investors, including myself took a short position in crude oil recently; however, I was one of the smart ones (i.e. lucky) to take my profit off the table after the recent pull back in crude prices a couple days ago. In this market, profit taking is the only way to stay ahead of the game.

For further proof that crude prices will come down, in the government's most recent energy outlook report: "WTI crude oil prices, which averaged $72.32 per barrel in 2007, are projected to average $110 per barrel in 2008, and $103 per barrel in 2009."

Investing in Water

Investing in water hasn't really hit mainstream yet; but right now might be the time to start looking into it. Just recently an MIT Professor warned that water is "the next oil." According to an article on Seeking Alpha, "[t]he World Water Council suggests developing countries will need $4.5 trillion in water infrastructure investments over the next 25 years," and in the US alone, we need an additional "additional $23 billion a year over and above current investments (currently about $60 billion) to keep our drinking water and waterways clean and safe."

In another article on MSN Money, water was given the term "Blue Gold." "The next decade may see a cartel of water-exporting countries rivaling the Organization of Petroleum Exporting Countries for dominance in the world economy." Also stating that the "central problem is that less than 2% of the worlds ample store of water is fresh"

You may want to look into the water ETFs, PHO or PIO; or Tennessee-based copper pipe and valve maker Mueller Industries, MLI, a $1 billion business with a PE of only around 10.

Venture Capital

After writing my post, Plastic Solar Panels, about startup companies innovating new solar technology, I got to thinking... it seems there are a lot of grand ideas being developed by small, private companies. I found a really good article about why such companies are staying private. Venture Capitalists are taking advantage of this and are profiting big time. No longer are venture capitalists risking their money on companies based out of their garage, but are now are funding proven companies.

Most investors have never tapped into private equity, and most don't even know how. Obviously, investing in private companies is not like trading on the New York Stock Exchange or Nasdaq - once you invest in a private company you are in a very illiquid position. That is why you must fully research the company before you hand over your hard earned money.

Investing in private equity can be very profitable, and it may be a viable alternative to the over-speculation found in today's mainstream markets. Forbes annualy lists the top venture capitalists; I suggest you start there for looking into investing in private equity. I also suggest reading Angel Financing: How to Find and Invest in Private Equityby Gerald A. Benjamin and Joel B. Marqulis.

After Hours Trading

I have too many clients asking me what after hours trading is, so I am going to dispel the myth tonight. After hours trading began less than a decade ago thanks to the help from computers. It's basically an electronic market with no regulation. I tell my clients it's like trading in the wild wild west. There is no entitlement, which means if you saw a quote displayed and you had your order in, you may or may not get filled. Unlike regular market hours, if you didn't get filled, tuff luck. It's also very illiquid, the spreads are very large, and you can only place limit orders (for your safety).

Plastic Solar Panels

Startup companies such as Konarka and Nanosolar have developed plastic solar panels. Say goodbye to the bulky silicon based solar panels and say hello to pliable panels that you can mold around your roof tile. Not only will this be more appealing to the eye, but it will create even more surface area to soak up the sun's energy. By 2009 you should see some of these products hitting the market.

My money is on First Solar (FSLR) snatching up one of these startup companies.Who knows, in a couple of years you will probably see these plastic solar panels selling at your local Home Depot (HD).

Will Money Suddenly Pull Out of Oil?

A lot of analysts are pointing to the fact that oil prices are not due to demand, but to speculators and price manipulation. You can also simply chart a graph of supply and demand to see that the price is not being held up by demand.

This is why I bought the ultra short oil ETF, DUG today. This is a great way to profit on oil prices coming down. I also started a poll about the price of oil to see what investors think about the current oil price. The poll can be found in the bottom right of my blog.