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The Next Three Booming Sectors |
The Appetizer
Over the last 10 years the stock market has
returned 0%. But with a little guidance you could have done much
better...
Energy stocks gave investors 150% gains.
Consumer staple companies earned 65% returns. And boring utility stocks
handed investors 50% gains. Wouldn’t you like to know what the next big
three sectors are?
Well, I just got out of an amazing meeting
with our investment analysts. The meeting began when I asked three of
IDE’s market experts for their single best long term ideas.
Only one, I said. So here they are. Three
sectors we believe will pop over the following 10 years...
Energy?
Yup. According to Andrew Gordon, the world is
forecasted to need 50% more energy by 2030 than we use right now.
How will the energy gap be bridged? Not by
oil, coal, wind, or solar. Wind and solar will not be able to add
significantly to their already miniscule contributions.
Coal? Forget about it. Environmental concerns
rule this out. Despite the ads you may have seen, there really is no
such thing as clean coal.
Oil? Sure oil will be a factor. The problem of
course is global production constraints mean that oil can’t possibly
deliver 50% more energy to the world than it’s supplying right now.
There is only one source of energy that will
be able to bridge the world’s energy gap. No technology and no other
energy source comes close to nuclear.
Why Nukes?
It’s simple physics really. Nuclear is more
efficient than fossil fuels. One ton of uranium can produce more than 40
million KH of electricity. That’s the equivalent of burning 16,000 tons
of coal. Or 80,000 barrels of oil.
Nuclear is already the future energy of choice
for India, Russia, South Africa, China, France, Sweden, and Belgium.
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The U.S. has 26 applications in line waiting
for government approval.
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Russia’s on its way to building 31 new
plants (partly to keep its oil-earning export dollars).
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India is adding 25 reactors to the 17 it
already has.
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And China plans to increase its nuclear
plants from 11 to 75 by 2030.
In all, there are 70 nuclear plants under
construction and many more in the planning stages. Let me put it this
way. If nuclear doesn’t fill the energy gap, it will mean a no-growth
global economy for the next decade...
So How Do You Play the Rising Nuclear Sector?
If you want to play the price of uranium going
up, look at Cameco (CCJ). It controls 15% of the world’s uranium
production.
But the easiest way to invest in this sector
(while diversifying) is to get into one of the three ETFs following the
nuclear industry. PowerShares offers Global Nuclear (PKN), iShares offer
Global Nuclear Energy (NUCL), and Market Vectors offers Nuclear Energy
(NLR).
Our Sound Profits portfolio already
includes a nuclear ETF. It’s just the beginning of several
nuclear-related investments we’ll be making over the next few years.
The Gem of South America
IDE’s normally grounded Ted Peroulakis has
just come back from a trip to South America. And it turned him into a
raving maniac. The country he’s raving about?
Brazil.
Ted and his wife spent a few days on a sugar
plantation, visiting friends. “Huge tracts of land are reserved for
agriculture, and Brazil has some of the best farmland in the world. We
drove around in an ethanol-fueled car. The ethanol comes from processed
sugar.”
The cities impressed Ted as much as the
countryside. The restaurants, cafes, boutiques, and malls were bustling.
“The air of optimism is amazing. There’s a feeling that Brazil’s economy
is over the hump, and they’re never looking back.”
Brazil is the “B” in the “BRIC” countries,
which also include Russia, India, and China. It was considered the weak
link of the group when the term was coined six years ago. But not
anymore.
Its middle class is much smaller than China’s
but much more affluent. Like Russia, it is resource-rich, but not nearly
as dependent on oil and arms exports. While India has a larger
population than Brazil’s it is constrained by huge parts of its
population stuck under the poverty level.
Brazil is the largest country in South America
and has the world’s eighth-largest economy. And in recent years, it has
experienced explosive economic growth.
Brazil boasts some great manufacturing
companies, including jet-maker Embraer and steelmaker Gerdau.
Ted loves Brazil’s natural resources,
agricultural production, offshore oil potential, growing middle class,
and expanding industrial base. Brazil is now the king of the BRIC
countries, and will continue its reign for years to come.
Ted’s Brazil Trades Are Soaring
Ted was so impressed with Brazil that he
recommended a Brazilian Exchange Traded Fund – trading under the symbol
EWZ – on April 9th. His position is up 74% so far.
And last Thursday, he recommended a call
option on Brazil in his
Options Power Trader. It’s up over 43%.
The only thing we don’t like about Brazil is
that it made this week’s cover of The Economist. Contrarians
may be spooked, but The Economist got it right. Brazil is the
next decade’s powerhouse country.
China’s Sinister Plan
China’s sinister plan to blackmail the world’s
economy has launched a little-known but unstoppable bull market in rare
earth elements. China controls nearly 95% of the world’s supply.
China’s Deng Xiaoping long ago stated that
rare earth elements “will be for China what oil was for Saudi Arabia.”
Mission accomplished. China is to rare earths what OPEC is to oil. Only
stronger.
Back in the 1990s, it flooded world markets
with this stuff. Mines in the U.S. couldn’t compete with the low cost
and closed shop. Now China controls the market. What’s next? This just
in from the U.K.’s Telegraph...
“Beijing is drawing up plans to prohibit or
restrict exports of rare earth metals that are produced only in China.
A draft report by China’s Ministry of Industry and Information
Technology has called for a total ban on foreign shipments of terbium,
dysprosium, yttrium, thulium, and lutetium. Other metals such as
neodymium, europium, cerium, and lanthanum will be restricted to a
combined export quota of 35,000 tons a year, far below global needs.”
So what you might say. After all, the market
is admittedly tiny... only $1.5 billion.
But you’ll find these unpronounceable minerals
in hybrid and electric cars, mobile phones, “smart phones,” catalytic
converters, superconductors, precision-guided weapons, and even
windmills.
The uses for these strategic elements are far
reaching and ever growing.
IDE’s Rusty McDougal expects China to consume
all its rare earth elements production within the next six
years or so. To protect its flank, China has a 25% stake in a promising
Australia project and is looking for other rare earth element projects
around the world.
And this is all happening while the U.S.’s
stockpile of rare earth elements is shrinking.
There is now a mad scramble to secure rare
earth elements. The manufacturing companies with access to these
materials will be huge moneymakers for investors. And Rusty will be
helping his readers find those companies in the Resource Windfall
Speculator. Click
here if you want to learn more about Rusty's service and how you can
get the Special Report on “The Last Mania: Rare Earth Minerals.”
The Main Course
So there you have it. Three experts, one idea
each.
It wasn’t easy putting this issue together.
Our editorial session lasted over 90 minutes and the ideas were coming
faster than I could write them down. Thank goodness the session was
taped.
Actually, all had many more sectors and
specific stocks they were excited about. They continue to find good
values for our readers around the world.
I‘ll share more of this remarkable session in
future issues. Meantime, don’t neglect to have nuclear energy, Brazil,
and rare earth elements as part of your portfolio. For more details, see
our analysts’ specific newsletters.
Invest Safely,
Bob Irish
Investment Director
Investor's Daily Edge
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