NEW ENERGY INVESTING

Alternative energy: How to bet; Investor enthusiasm is high, here’s what to look for, and what to be wary of
Steve Hargreaves, March 5, 2007 (CNN Money)

- Everyone wants to know where to put their money in alternative energy…And big money is already moving in…the flood of venture capital and institutional money [compares] to the dot.com days.
What can a retail investor do? We asked several pros…
- Do your homework… a company with a price to earnings ratio over 50 is probably overvalued in this sector…watch cash flows…see who the clients of the company are… companies that do business in California, where there are mandates to use renewable energy,…probably have a solid client base.
- Watch oil... and oil politics…The viability of your investment will depend in large part on the price of oil…alternative energy needs to have oil over $50 a barrel…a bet on alternative fuels is really a bet that oil prices will go higher…Or, it's a bet that the government will keep or raise subsidies [on]…wind, solar and biofuel…there is the possibility of mandatory carbon limits, which would further help alternatives…if oil goes back to $30 a barrel, the whole sector may fade away.

- Diversify: Spread your investments between wind, solar and biofuels…don't just pay attention to the small companies with big ideas. Big companies…are players…[and] a fairly small portion of their earnings come from alternatives…[which] insulates them from downturns…[though this] also prevents their stock from benefiting greatly when good times hit…
- Think long term…10 years out…

Or you could buy a Prius and get it converted to a plug-in hybrid...