For long-term investors, the volatility can cause early baldness.

For short-term traders, on the other hand, it is a dream come true. There are investment opportunities all over the place.

One of the biggest movers in the pre-vote hype is Broadwind Energy (NASDAQ:BWEN), a growing player in the nation’s wind-energy industry. As a maker of turbine gearing, the company stands to see substantial growth if the sector finds the legs so many politicians are trying to force.

As I write, shares of the billion-dollar company are up by more than 35%. The stock closed the day yesterday at $8.23 and is currently trading for $11.23.

With no material news coming from Broadwind executives today to explain the massive surge in valuation, investors are left wondering what to think.

Is the action due to Pelosi’s impending vote? Or is there something bigger on the way?

I will save the pain

While only time will tell for certain, my money is on the speculative bet. I have studied all sorts of merger announcements, acquisition deals and contract releases throughout my career. There are almost always “tells” leading up to a big news event, but rarely are they as obvious as today’s.

Insider buying is a great way to end up in court and a 35% price spike typically catches a few regulatory eyes. Insiders are not responsible for the extra million or so shares exchanging hands today.

It is speculative money.

If you are looking to take advantage of the day’s action, the short side offers the strongest profit opportunity, especially if today’s vote is a no go.

As the markets digest the action and realize the nation’s economic situation is not going to change overnight, Broadwind will give up much of today’s gains, even if only temporarily.

Options investors would be smart to investigate some short-term puts, while folks that like to stick with the equity side of things should think about borrowing shares today and paying for them later.

This is a strong short opportunity. If the legislation fails, it will look even better.

I like wind power, but the speculation throughout the industry is far too overdone.

Source: What’s with Broadwind Energy Today?

This from Rude Awakening:

Now that the Obama Administration is about to descend upon Washington DC, the nation’s list of “Top Priorities” will receive a makeover. I will leave it to political pundits to evaluate the pros and cons of the makeover. My beat is investing. So I will be looking for opportunity in those industries that seem most likely to prosper during the early days of the Obama Administration. Clean Energy and Infrastructure are two leading candidates…which is why Trinity Industries (NYSE:TRN) is one very promising stock.

Trinity is a multi-industry company. It has divisions that sell products and services to the construction, transportation, industrial and energy sectors of the economy. Trinity’s five principal business units include its Railcar, Railcar Leasing and Management Services, Inland Barge, Construction Products and Energy Equipment groups.

I’ll get to the windmill angle shortly. But first, I want to explain that each of Trinity’s business units has its own story. And this helps put the windmill tower business in perspective.

Trinity’s Railcar group has a long history of building and repairing railway cars and components. These include auto carrier cars, boxcars, gondolas, hopper cars, intermodal cars, specialty cars and tank cars. So Trinity has long experience in fabricating metal for tough outdoor jobs like railway equipment.

And Trinity’s Construction Products group has a long history producing concrete, aggregates and asphalt, as well as highway products like the beams and girders used in highway bridge construction. Thus, the Construction group has solid experience serving customers in the construction and foundation industry.

But the business group that we want to focus on is the Energy Equipment Group (EEG). The EEG manufactures large tank systems (such as propane tanks), tank containers, tank heads for pressure vessels and structural wind towers.

So the EEG capitalizes on Trinity’s long experience in building robust metal systems like rail cars and pressure tanks. And the EEG utilizes the corporate experience in the foundation and construction work that the Construction group has.

Trinity’s Energy Equipment Group produces wind towers through a wholly owned subsidiary called Trinity Structural Towers Inc. Quite simply, TSTI fabricates tubular towers, and I mean BIG tubular towers.

These tubular towers are the large poles on which the windmill turbines sit. They can be 20 or more feet in diameter at the base, and 250 or more feet high. Some of the poles even have an elevator inside, so the maintenance people can get to the top. And some of the towers are so big that you could land a helicopter on the topside platform. Is that big enough for you?

These massive towers have to be able to withstand the utmost in stress. First, there’s the windmill turbine and blades that can weigh up to 100 tons – the weight of a fully-fueled Boeing 757. And then this assembly has to handle the stress of high winds, heavy rainstorms and lightning strikes. The towers will spend the next 40 or 60 or 80 years exposed to the elements. The turbine blades at the top can be over 200 feet long and rotate at speeds of over 20 revolutions per minute. That’s a full revolution of the blade set every three seconds. And that’s one heck of a lot of stress. So only the strongest tower systems can hold up.

Just the tower foundations alone can go 50 or more feet into the Earth. And because soil and bedrock conditions change over any large area, almost every windmill tower requires its own unique engineering, excavation and construction plan.

So TSTI offers an array of services related to design, fabrication, construction, installation, testing, operation and maintenance of windmill towers and generating systems. In this respect, TSTI provides steel turbine components, concrete and aggregates, product transportation and specialized coatings that relate to wind tower design and construction. (Just the effort to transport these large tower components to the site is a logistical business in and of itself.)

TSTI operates some massive production facilities. Indeed, the TSTI plants are among the largest production facilities in North America for fabricating tubular wind towers. TSTI can fabricate to the detailed design of a turbine manufacturer like GE (NYSE:GE), Vestas or Gamesa. Or TSTI can work with customers to design and fabricate towers that meet unique criteria for both the turbine and project location.

TSTI subjects its towers to strict quality tests similar to those used for building high-pressure tanks and railway tank cars. And Trinity adds value with its extensive corporate experience (from railway cars and barges) in coating structures exposed to every conceivable weather condition. This is critical for the future maintenance and safety of the tower. After all, the tower holds up the turbine and generator. And a steady generator is the key to the overall reliability of the power system — not just of the windmill itself, but for feeding power into the overall electric grid.

Trinity is currently producing towers to support turbines as large as 2.5 megawatts, enough electricity to power about 1,750 homes ( or two average-sized Wal Mart -NYSE:WMT-stores). The next generation of turbines will be rated at 3 megawatts or more, and Trinity will have towers for those, as well.

Wind power currently produces a fraction of 1% of the U.S. total electrical supply. But there are plans and policies afoot to increase U.S. electric power output to more than 20% of the total supply within the next 20 years. The only way to do this is by setting big turbines onto big tubular towers. No, make that lots of big turbines onto lots of big tubular towers.

And who makes those big tubular towers? Now you know.

Demand for rail cars and barges has fallen in the past year, and this has hurt Trinity’s overall profitability. But Trinity is compensating with a fast-growing backlog of orders for windmill towers. Trinity even pays a dividend of 32 cents per share, or a yield of about 0.9%.

I expect Trinity to be a growing stock, even in a market that will be weighed down by many other negative economic and political issues going forward. By the end of 2009, Trinity could be selling for $46 per share.

Source: Buy Trinity Industries

This from Smart Profits Report:

The winds of change are coming…

Not only does that include Barack Obama taking office in a little under two months time, it could also include a natural energy resource receiving an increasing amount of attention.

Last year was a breakthrough year for the U.S. wind industry, with total wind-power capacity rising by 45%. That accounted for 30% of all new power production.

And if you think wind made impressive advances when an oilman was in the White House, just wait until President Barack Obama takes office.

During the presidential election, Obama made renewable and alternative energy a key campaign issue, sounding off controversially against the continued use of coal-fired power plants.

“If somebody wants to build a coal-powered plant, they can,” he said during the campaign. “It’s just that it will bankrupt them.”

Global… And Growing At An Accelerated Pace

Recent legislation mandates that at least 15% of U.S. electricity come from green sources by 2020. But under the Obama administration, if all goes according to plan, expect to see calls for 10% of our electricity to come from green sources by 2012 and 25% by 2025.

The U.S isn’t alone in its call to clean up the environment this way. China’s new energy plans, released in September 2007, included a push to generate 10% of its power from wind by 2010 and 15% by 2015.

And the EU has mandated that 20% of its energy comes from renewable resources like wind by 2020. In some places, such as Denmark, that goal is already a reality. And across Europe, efforts are already well under way to ensure that wind turbines account for roughly one-third of all new generating capacity installed in the next few years. That means providing electricity for 90 million people by 2010.

The wind power movement isn’t limited to large countries like China or to rich countries like the United States. It’s global.

North Africa, the Middle East and certain South American countries have all gotten into the act. The first two regions increased wind energy installations by 42% last year.

And a recent study showed that Egypt, with its strong wind activity in the Suez Gulf, could host 20,000 megawatts of wind farms.

And then there’s Brazil, which has 14 projects totaling 107 megawatts scheduled for completion by the end of the year, and another 900+ megawatts slated for 2009.

This Investment Has Both Power And Potential

And it’s not just governments that are embracing wind power. Even oil billionaire T. Boone Pickens is getting behind this alternative energy trend. He’s wagering $12 billion on an area spanning the Texas panhandle that, when finished, will be the world’s largest wind farm. He’s already ordered 667 turbines from General Electric.

Why has this legendary oil investor hitched his future to wind? Because he knows that this alternative energy source is our best shot at reducing our dependence on foreign oil. In one year, a single 3-megawatt wind turbine produces as much energy as 12,000 barrels of oil – without consuming any natural resources or emitting any pollution or greenhouse gases.

The good news, as Pickens points out, is that the United States is the Saudi Arabia of wind power.

The Great Plains is home to the greatest wind energy potential in the world, and Pickens envisions a string of wind facilities stretching from Texas to North Dakota capable of producing 20% of the nation’s electricity.

But right now, even despite these huge advances, wind power still accounts for a tiny fraction of the world’s energy needs: About 1% in the United States and 1.3% globally.

That’s all set to change, though…

Where Wind Energy Is Going Next

According to the Department of Energy, wind energy could generate 20% of U.S. electricity by 2030. Compared to today, that’s a 40-bagger industry-wide. This means that a few of the best and the brightest wind stocks could easily rise 100-to-1 before it’s all over.

You can do the math. Unless someone discovers the fountain of youth, I doubt you’ll find any industry in the world with as much growth potential.

Check out these other wind facts…

• Wind energy grew 667% between 2000 and 2008, from 2,554 megawatts of installed U.S. capacity to 19,600. In that time, in fact, the United States became the world leader in wind power generation, outpacing Germany.

• A 2005 NASA study pegged the power of the global wind supply at 72 terawatts, or roughly five times global power consumption. That means there is virtually no limit to the degree from which the world can harness this 100% clean, 100% free and 100% renewable resource. It’s only a matter of time, and the clock is ticking.

• The demand for wind power isn’t only strong and globally pervasive, in most nations, it’s been written into law.

• Nearly three-dozen U.S. states that have mandated that utilities buy an increasing amount of their electricity from renewable resources. They literally have to buy wind turbines. And that legal obligation is worthwhile, too. As part of the recent $700 billion TARP bailout, Congress extended a $0.02 per kilowatt-hour production tax credit. That means the cash goes straight to their bottom line instead of to Uncle Sam. Both these factors will continue to provide a strong incentive for wind power.

The changing of the White House guard takes place in less than two months’ time, with Obama practically vowing to turn the White House “green.” Coal power is out. Wind power is in. And the wind industry will likely be the focal point of government mandated energy initiatives for the next few decades.

We’ve pinpointed a select group of FOUR investments that will benefit the most when an unprecedented infusion of government cash is pumped into this industry.

These companies are immune to nearly all outside economic forces and have their sales orders on file in amounts that could set them – and you – up for years to come. Click here to find out how to profit from wind power.

Source: With A Changing Of The Political Guard, Now Is The Time To Harness The Profit Potential Of Wind Power

This from Investment U:

Our next President will be faced with unprecedented challenges in health care, energy, global warming, an aging infrastructure and huge “legacy” automobile businesses that are teetering on the verge of bankruptcy.

He’s also being presented with an incredible opportunity… one that, if implemented correctly, could have profoundly positive effects on the economic health of the world, just when we need it.

For years, the engine that fueled global economic growth was the spending of the American consumer. Market crashes because of the dot-coms and the housing boom have left many individuals with too much debt and not enough money. Americans are tapped out, and they’re closing their wallets.

Reinvigorating our economy rests upon jumpstarting consumer spending – and ultimately improving the financial condition of millions of Americans. It’s much easier said than done – and this new administration will have its work cut out for it.

If you’ve got an eye on how these government actions could benefit your bottom line, you should take a look at our past. You might find these newest sources of “economic fuel” and wealth creation look surprisingly familiar. The government’s solution could be just the thing our portfolio needs for a healthy return in the years to come…

The Cause of The Current U.S. Economic Slowdown

Ask most people to give you the cause of the current economic slowdown enveloping the United States and the rest of the world, and their likely answer will be the explosion of housing and the subsequent bubble in the credit markets.

But that was just the peak of the problem, not the beginning. The trouble has its roots in something that started 20 or 30 years ago.

That was when we started seeing the shift away from personal savings in America and toward the beginning of a huge consumer credit crisis.

And now, we are witnessing first-hand the effects of the increasing use of massive leverage can have on the markets, and ultimately on the American consumer. They’re broke and can no longer be the fuel that powers the world’s economic engine.

With consumer spending slowing, layoffs increasing and hiring all but stopped, the prospects for future economic growth aren’t particularly bright. Or are they? We have almost everything we need to fire up the world’s economic engine again: The ingenuity of the American people, plenty of factories, etc.

There’s only one thing missing… the fuel to get it going again. So what’s going to be the new “fuel?” History is a great teacher, and we need look no further than the Great Depression, and Franklin D. Roosevelt’s New Deal.

The New Deal was a series of programs Roosevelt employed between 1933 and 1936 with the intent to provide work for the unemployed, reform of financial and business operations, and economic recovery. Here are a couple of examples:

• The Works Progress Administration (WPA) was the largest of the New Deal agencies. It alone was responsible for providing almost eight million jobs. What did all of those people do? They built public buildings, roads, bridges and other infrastructure projects. Anyone who needed a job could easily become eligible.

• Another program, created by an act of Congress in 1933, was the Tennessee Valley Authority. The TVA, as it was known, was chartered to provide food, navigation and flood control, electrical generation, fertilizer manufacturing and general economic development for the people of the Tennessee Valley, a region hard hit by the Great Depression. And it was just what the doctor ordered: The TVA’s projects were catalysts that fueled unprecedented economic growth in the area that continued through the 1960s. Today, the TVA’s 43 power plants make it one of the largest producers of power in the country.

7 Companies Profiting From a “New” New Deal

While the slowdown we are experiencing is nowhere near as severe as the Great Depression, the solution will be the creation of similar New Deal programs in two specific areas: the infrastructure and energy sectors.

More specifically, developing energy savings, making alternative forms of energy our mainstream sources, and building the green infrastructure to support what will be our growing energy independence.

More insulation in a house’s walls, lower thermostats, fluorescent bulbs, more fuel efficient cars and commercial building energy management systems are just a few of the ways to save energy. Public transportation is another. Expect the new government to provide tax incentives for these and other programs as short-term incentives to save. Companies that stand to benefit are Owens Corning (NYSE:OC): insulation, General Electric (NYSE:GE): lighting and Johnson Controls (NYSE:JCI): energy management systems.

Clearly wind, solar geothermal and tidal energy companies stand to benefit, too. While a comprehensive list is beyond the scope of this article, companies like First Solar (Nasdaq:FSLR): solar panels, Ormat Technologies (NYSE:ORA): geothermal and Vestas Wind Systems (PINK:VWDRY): wind turbines, will do well.

As new green sources of energy begin to come on-line in a big way, the nation’s electrical grids will have to be upgraded to move the power to where it’s needed. This is a huge project, and one of the biggest winners will be ABB (NYSE:ABB): power and automation technologies.

Ironically, the same government that’s trying to find a solution to the energy problems we face has been the biggest roadblock to solving them. The trillion dollar coal and oil subsidies prolong the carbon industry’s advantage over – and are a constant roadblock for – fledgling alternative energy companies.

The new President and his administration have an opportunity to turn the recession ship around, before it runs aground. By implementing new energy and infrastructure projects, thousands of new jobs will be provided at a time when they are desperately needed, and most importantly, these projects will provide the fuel to restart the world’s economic engine.

Source: Obama’s New “Economic Fuel”… and 7 Ways to Profit

In one story, the Journal covers a recently released annual report from the International Energy Agency. According to the Journal, the IAE paints a gloomy picture of energy shortages and escalating costs of discovery and recovery.

The IAE says that current low oil prices are an anomaly linked to the economic crisis embracing the world. Eventually, when the economy regains its health, oil prices will continue to climb over the coming years to hit $200 a barrel by 2030.

One problem with energy prices remains a dilapidated infrastructure. In turn, energy companies would have to invest more than $26 trillion by 2030, with over half of that going to increased power generation and distribution. Most of the rest of the investment will go to exploring and developing new sources of oil, the Journal writes.

Underinvestment by the oil industry could be just as responsible as increased global consumption for future price increases. Energy companies will have to spend $350 billion a year on new oil and gas projects through 2030. By comparison, the industry spent a total of $390 billion from 2000 to 2007, said the Journal.

There are two obstacles faced by oil companies when it comes to making these massive investments.

The first is the state of the current economy and shrinking energy consumption. The second is that many oil fields are past their prime, as Peak Oil proponents have been saying for decades. To extract more oil presents a questionable economic argument for new investment.

The IEA asserts, however, that renewable energy sources will grow by over 7% a year – reaching 4% of the world total by 2030, up from 1% in 2006.

That said, the IEA also said the U.S., Europe and Japan will likely never use more oil than they did last year. All projected increases in oil demand will come from the developing world, mainly China, India and the Middle East.

So if in fact the U.S. oil consumption has peaked, does it make sense for our new democratic regime to sink $150 billion over the next decade into creating new jobs for the green sector?

That’s the question asked in the second article in today’s Journal.

This piece challenges the wisdom of creating government-subsidized green jobs, at a time when the jury is still out about the economics of green energy.

President-elect Obama maintains that spending $150 billion over the next decade to boost energy efficiency would help create five million jobs, according to the Journal.

But the article goes on to say that these numbers are under assault by another contingent in the Obama camp.

As the Journal writes, several studies estimate that $1 invested in renewable energy or energy efficiency would yield up to four times as many jobs as $1 invested in oil and gas, whose basic infrastructure of wells, refineries and pipelines has been around for years. Moreover, those studies say, clean-energy jobs are likely to be centered in the U.S., unlike jobs in the oil and gas industry, which increasingly are spread around the world.

From our perspective, this argument is riddled with holes. Right now, China is the dominant supplier of solar-energy systems and plans on extending its lead. China is also making a push to develop state-of-the-art wind turbines.

While heavy hitters such as General Electric and T. Boone Pickens talk about their multi-billion investments in wind, there has been little competition to get these deals. Sooner rather than later, China will step in – and we know how that story ends.

The Journal also says that job creation in a burgeoning green sector could also lead to job losses in mature energy industries such as coal and oil.

Robert Pollin, a professor at the University of Massachusetts, Amherst, who co-wrote a study that questions the job target by the Obama campaign.

It said that $100 billion spent over two years could produce two million green jobs, according to the Journal. But his study didn’t count jobs that might be lost elsewhere in the economy if the country shifted to more expensive sources of green energy.

As we see it, more expensive energy leads to inflation, which also results in job losses. Businesses have to maintain a certain level of profitability, and if they’re paying more for clean energy it seems that heads will roll in the interest of net profits.

Once again, the numbers point to higher investments in fossil-fuel infrastructure versus clean energy. It’s not that we’re opposed to a cleaner environment, but new technologies in fossil-fuel discovery, reduced emissions and improved efficiency will continue to provide bigger returns in fossil fuels.

This from Taipan Publishing’s emerging markets blog:

As climate change and energy independence have headlined a number of events during the past two years of presidential campaigning, I’m happy to see alternative energy back in the investment ring.

Surprisingly, many top-notch European companies see the U.S. as a major growth region for the renewable energy business, and they are coming over in droves to set up shop.

Let’s take a look at just one of the technologies that’s already being employed around the world: wind power.

The U.S. is in bad shape compared to the rest of the world. Some of the world’s leaders in wind power, like Spain, Denmark and Germany, generate a significant percentage of electricity from wind. But even countries like Morocco and India generate a larger percentage of electricity from wind than the U.S.

Morroco gets 1.7% of its electricty from wind. India? 4.6%.

The U.S. gets 1.37% from wind, and that’s after record growth last year that saw 3,100 new turbines built in 34 different states.

Now listen to this: The Department of Energy released a 248-page report that shows how the U.S. can generates as much as 20% of its electricity from wind power alone… by 2030. Do the math and you’ve got a 1,360% increase from currend wind generation.

That means an additional 7,000 turbines a year will need to be installed over the next nine years if we want to meet this goal.

Guess what? That type of demand won’t be met by U.S. companies. General Electric (NYSE:GE) is already committed for the next few years with T. Boone Pickens’ wind farm planned for Texas.

No, folks… This demand will have to be met by international companies… Companies that have climbed amazingly quickly over the past two and a half years. In fact, seven different international companies have more than doubled since 2005.

(Note: That doesn’t include the global meltdown the world’s experienced over the past couple months.)

And many of these companies already have operations here in the U.S. and are looking to expand, sometimes into old manufacturing plants.

Like Spanish company Acciona SA (MCE:ANA) who plopped a wind turbine manufacturing plant in an old pump factory in West Branch, Iowa…

These investments have sparkes a wealth of more factories, like the small company that occupies an old Maytag factory making concrete towers to support wind turbines while TPI Composites built a brand new plant across the street and promised to hire 500 employees.

It’s revitalizing old manufacturing towns in what’s called “The Rust Belt.” These are places who saw manufacturing plants uprooted and moved overseas, or just closed down completely.

It’s a very interesting area for investors.

No matter what you think of either candidate for president, both have promised to curb our dependence on foreign oil and build jobs here at home. Both have promised more alternative energy investments.

Seems like a win-win for both investors and many of those European companies coming to the U.S. and building turbine plants.

Source: Green Investing: The New Industrial Revolution

This from Investor’s Daily Edge:

It’s finally here.  The long awaited and hard fought election will end tomorrow (at least I hope we don’t see a repeat of 2000 where we don’t know who won for weeks).  Rather than make predictions about the election itself, I want to tell you how I think things will play out after the election.

First, I think the overall market will rally after the election regardless of which candidate wins.  There could be a knee-jerk reaction to the downside should Obama win, but this is part of the old belief that Democrats are bad for business and investing.  History tells a different story than the actual belief though.

The thing that will happen on Wednesday is that the uncertainty will be removed.  The uncertainty of the election has been weighing on the market for the past few months.  It’s been hard to tell, because of the credit crisis, but trust me the election has been weighing on the market as well.

So overall we will likely see the market rally over the next couple of months.  Historically the market rallies after elections, regardless of whether it is a Republican or Democrat that is elected.

Secondly, as I have expressed in recent articles, the market is extremely oversold and the sentiment is extremely bearish.  So even if this weren’t “the most important election of our life” we would likely see a year-end rally.

As far as each candidate and the sectors they will impact the greatest, the scenarios are very different in some areas and very similar in others.  Let’s look at the winning and losing sectors under both Obama and McCain.

The big winners with an Obama victory will be Biotechnology and Alternative Energy.  With Biotech, the fact that Senator Obama wants to give the healthcare system a complete overhaul will push for new technology that improves healthcare at a lower cost.  Look for incentives to flow into this sector whether it is with tax credits or grants, there will be a push for new developments from the group.  Senator Obama also supports stem-cell research and should he win, look for a boost to stocks in this arena.

Alternative Energy, particularly solar, will be a big beneficiary of an Obama administration.  On the campaign trail he has said he wants to direct $150 billion towards alternative energy and lowering our dependence on foreign oil.  As we all know, what is said on the campaign trail and what is done after the fact can be very different.  While he might not able to direct the whole $150 billion toward the sector, you can bet there will be money pushed that way, how much money is available will be determined later.

One sector that will certainly get hurt with an Obama administration is big-cap pharmaceuticals.  The same desire to overhaul the healthcare system that I mentioned as a benefit to biotech will be a hindrance to pharmaceuticals.  The reason for this is that he will likely push for lower drug prices at the consumer level.  This will limit what the drug makers can charge and limiting their revenues.

As for McCain, the obvious winners will be the Defense sector and oil and gas sectors.  While Obama believes a timeline should be set for withdrawing from Iraq, McCain doesn’t believe such a mandate should be put forth and the U.S. will likely continue to spend heavily on Defense should McCain win.

A McCain victory should also provide a boost to nuclear energy companies. He has made it clear on the campaign trail that he is in favor of finding alternative energy sources beyond oil, but where Obama prefers wind and solar energy, Senator McCain prefers nuclear energy.

One area that will likely lose should McCain win is the infrastructure sector.  Senator McCain wants to curb government spending, at least that is what he is saying on the campaign trail.

Like I said about Mr. Obama wanting to spend $150 billion on alternative energy sources, what is said on the campaign trail and what actually happens after the election are two different things.  Remember President Bush campaigned on less spending as well, but there haven’t been any cuts in spending over the last eight years.

Regardless of which candidate wins, they will be inheriting one heck of a mess.  The current economic environment is one of the worst I have seen in my lifetime, the deficit that we are facing is astronomical, and the job losses we have had over the last year have combined to make this a daunting task for the next administration.

Consumer confidence is at an all time low recently.  The best thing the new President could do for this country is lift the spirits of our citizens.  Consumers are not likely to open up their wallets until they see hope that the economy is improving.  Lifting the confidence level might get them to open their wallets a little.

Regardless of who wins tomorrow, I wish them luck.  They are going to need more after the election than they need it in the election.

Source: Winning And Losing Sectors After The Election

If John McCain manages to pull off a surprise victory next week, Martin says biotech stocks will get a boost from fewer restrictions on drug prices.

This from Smart Profits Report:

One week from today, America will elect its next president.

What was a hotly contested race a few weeks ago now appears to be swinging in favor of Democratic candidate Barack Obama, but that doesn’t necessarily mean Election Night will be much less dramatic.

The question is: How will this major event and changing of the White House guard affects the economy, the stock market – and more importantly, individual investors? Many investors are already sick to death of the drama that the stock market has tossed at them this year, so aren’t likely to welcome much more.

Let’s take a look…

The Four-Year Presidential Cycle And Its Impact On The Stock Market

Despite the current rhetoric and hype surrounding the candidates’ respective policies, measures enacted typically don’t make any serious dent on the economy for a year or two after they’re passed into law.

Yale Hirsch, one of the co-authors behind the respected Stock Trader’s Almanac has studied the effect that presidential election cycles have on the stock market. And his research indicates that the market generally follows a pattern, regardless of whether a Republican or Democrat administration wins the White House.

According to the theory, here are the stock market returns between 1948 and 2007…

• The first post-election year is typically the worst performer in the presidential cycle, with the S&P 500 posting a 7.3% return
• The second year sees the highest record of bear market bottoms, with the S&P recording a 10.1% advance.
• In the third year of the presidency, the market picks up dramatically, notching up a 22.9% gain.
• The final year of a presidency sees more uncertainty creep into the market, with a 12.1% gain. That’s still above average, though.

While the past four years haven’t followed the above trend, this is an entirely different time, with the U.S. experiencing an epic financial crisis right on top of the presidential election.

And the market could easily fall back into this pattern… because right on schedule, economists foresee recession conditions over the next two years.

The Post-Election Healthcare Environment

As an investor, if you’re looking for a map of how the next cycle will play out – and who could be affected the most – a lot depends on whether the winning candidate can live up to his promises. But that can depend largely on who controls Congress and the importance of the sector.

For example, areas like healthcare, energy, education, and defense are always going to be pretty heavily funded, no matter who is running the show.

With regard to healthcare, this election is once again filled with candidates’ promises of how they’re going to create affordable healthcare for all Americans – a task that always seems to be easier said than done.

According to the International Strategy and Investment (ISI) research firm, a McCain administration would probably represent good news for firms like Pfizer (NYSE:PFE), Genzyme Corp. (NASDAQ: GENZ) and Genentech (NYSE:DNA), since they’d be less likely to face restrictions on drug prices.

In addition, McCain may not opt for as much of an overhaul of healthcare as Obama, so managed care firms could see an advantage. Obama would seek changes to Medicare and crack down on medical malpractice areas, so look for managed care and insurance companies respectively to undergo Obama’s favorite word… change.

Since both men have espoused unique alternatives to our current system, the healthcare sector will see changes regardless though.

Look To Renewable Energy Firms… No Matter Who Wins

As for energy – one of the hottest spots on the market – both Obama and McCain support crucial efforts to explore alternative energy in order to relieve some of America’s dependence on getting energy from volatile nations.

Earlier this year, McCain even went so far as to offer a $300 million reward for anybody who could design a “battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars.” And both men attended former president Bill Clinton’s National Clean Energy Summit in Las Vegas, Nevada, back in August.

McCain has also thrown his weight behind greater offshore drilling and “clean coal” production, right alongside ethanol production from corn. Obama has expressed more interest in other forms of alternative energy, such as wind and solar power – two areas that could receive more subsidies and mandates under his administration.

In this respect, ISI says solar leader like First Solar (NASDAQ:FSLR), wind turbine manufacturer Vestas Wind Systems (CPH:VWS) and waste-into-energy firms like Covanta Holding (NYSE:CVA) could see benefits.

The Battle For Headlines: Economy And Market vs. Obama And McCain

The bottom line here is that while both candidates are busy championing their ideas and policy proposals to the country and certain sectors and stocks will benefit more than others from a regime change, the overall stock market isn’t going to be as affected as some people might think.

According to John Merrill, chief investment officer of Tanglewood Wealth Management, the market isn’t really paying that much attention to the candidates, no matter how much both like to speak out. “Today, the market and the economy are shaping events much more than the presidential election.”

Source: The Presidential Election Cycle… What The Obama-McCain Battle Means For Stocks

I am not sure this country should follow the advice of a man that has lost over $2 billion so far this year. But then again, some of the nation’s most powerful men have lost far more than that in just the past few weeks.

If you spend any time watching your living room television set, you have seen T. Boone Pickens discussing his proposed energy plan. The 80-year old has spent over $58 million of his own money to tell the nation it must lose its dependence on foreign oil.

What the white-haired oil barren does not tell you is that his money is not where his mouth his. While Pickens was telling you and I to fund his $100-billion idea, the fund he manages, BP Capital, was invested heavily in crude. And thanks to Pickens’ investing decisions, the fund has dropped in value by over 60% so far this year.

It is no wonder the investing firm’s phones are ringing off their hooks with folks looking to pull their money out of the fund. About half of BP Capital’s investors want out of their positions. Their capital withdraw has taken the fund’s size down to just $400 million.

It is a strong blow to the oil maverick’s ego.

Pickens promises to make the $2 billion back, but it is going to be much, much harder now that he has less funding to work with.

Should have known better

Investing in the energy business is a hard racket. After all, it is one of the most cyclical industries out there. But with decades of experience and several boom-to-bust cycles under his belt, one would expect Pickens to be able to avoid his current situation.

With so much negativity surrounding the investor and his picks, it will be hard for folks to get onboard with his newly proposed plans. As oil prices drop with the slowing economy, expensive prospects like wind, geothermal, and solar power are going to look far less attractive than they did when Pickens started his campaign.

While Pickens is pushing his alternative-energy agenda on the mainstream networks, his philanthropy is much more indicative of the investor’s true thoughts.

Instead of adding more money to his energy investments, Pickens is donating it to his beloved Oklahoma State and its football team. He just wrote a $65 million check earmarked to help finish the school’s football stadium.

Plus, Pickens said he would be returning the $125 million he managed in a hedge fund for the school. When he started the investment, it was worth $165 million.

Oh well, it is the thought that counts.

Source: T. Boone Pickens shows his cards

This from the Rude Awakening:

Earlier this week, I attended a privately sponsored presentation on U.S. energy policy. The main speaker was a senior faculty member from Carnegie Mellon University. This guy has been “doing electricity” for about 40 years or so. He has written reports for the National Academy of Sciences. When the people at the U.S. Department of Energy have a question about electricity, they call this CMU professor.

The news is not good. In 2007, there were about 144 new coal-fired power plants on the drawing boards of the U.S. energy utilities. But, said the professor, “We will probably build none of them.” Indeed, “The electric industry in the U.S. is in terrible shape,” said the CMU man. So we should expect local and regional brownouts and blackouts to become common occurrences “within five years.” But the first isolated instances of brownout and blackout will hit us much sooner than that.

Why is there such a gloomy forecast? Because essentially, the deregulation of the 1990s was botched. According to the CMU electricity expert, botched deregulation “slowed investment, raised prices and led to more and more uncertainty.” So now few utilities or their executives want to take political, regulatory, technical or financial risks. Hence, the entire long-range planning cycle has broken down.

It’s almost impossible to decide what to build, and at what scale. Costs are exploding, particularly for new construction. It’s safe to say that most power plant construction cost projections have doubled within the past 18 months. The prospect of fast-changing environmental regulations also adds to the uncertainty. No one wants to build a power plant and learn in five or 10 years or so that environmental regulations are going to shut it down.

Even the alternative energy industry — with wind, solar and geothermal as the poster children — has formidable challenges. The biggest issue is cost competitiveness. That’s because alternative systems provide power at costs that range from slightly higher to much higher than traditional power from, say, coal plants. Then there are issues of reliability, due to the intermittent nature of wind and solar, and the still-novel nature of geothermal power. And other issues include the lack of transmission from the usually remote sites of wind and solar facilities.

Overall, U.S. power producers face the prospect of many different forms of investment uncertainty. What will be the availability of different fuel mixes? Will coal still be useable? Or will natural gas be available at a cost they can afford? Can power producers invest in nuclear systems when there is still no definite program for disposing of the waste stream over the next 50 years? Or should the utility companies go all out for alternative systems?

But the next question is how much can consumers afford to pay? And what rates will the regulators allow? If utilities invest in alternative power systems (like wind or solar) that produce electricity at, say, 20-30 cents per kilowatt hour (kwh), will the regulators set those relatively high costs as the level of reimbursement? And for how long? What if the regulators permit the higher costs for only a few years and then penalize the utilities because some “better” technology comes along? At the end of the day, the base line cost of electricity is set against the cost to produce comparable coal or natural gas-based electricity. And this cost setting occurs even though there is a growing bias against burning carbon in the U.S. political and regulatory culture. One attendee at the discussion commented, “When you’re in a ‘no-win’ situation, guess what? You can’t win.”

The CMU professor has looked at historical trends for power in the U.S. His best estimate is that over the next decade or so, the price for electricity will about double on average throughout the nation. “This would put the cost of electricity about on par, as a percentage, with where it was back in the 1950s.” But that is only if people keep making investments in new power systems and the nation adopts conservation and efficiency measures on a large scale. Absent that? It’s lights out.

So you might not see it in your daily life — not yet, anyhow — but the power industry is currently paralyzed by the uncertainty of lopsided risks. And as old power plants age and go off stream, there will be less and less reserve power. Costs are going to rise. And reliability will fall. It’s inevitable.

So one investment sector that ought to do well over the next five years is power and backup power systems. And particularly, the companies that should do well are involved in power systems that are off the drawing boards and in some phase of construction, or near completion.

Source: A “Jaws” Market