Templates for an Energy Revolution on the Stock Market (Part 1)
The stock market is inseparable from international politics. Even communists acknowledge the stock exchange reality of modern life. Most US stocks can be owned by foreigners. Washington encourages American investments abroad. Opinions are divided on links between Iraq and our unquenchable thirst for oil. However, there is no doubt that Anti-American interest in Venezuela uses oil trade as a weapon against us. The Russians do the same thing with heating gas for some former units of the Soviet Union. The strategic oil reserve of Alaska is a prime source of US military strength. Energy is a potent stock with over one thousand world listings from coal, oil, gas, and alternative energy enterprises.
Some energy stocks are volatile. They depend on assets and customers in far-off lands. Who knows when Mongolia will suddenly have a new government and restrict US corporations that operate there? The Indian government has changed its mind about buying our nuclear power plant supplies and services nearly every month of 2007! Most alternative energy stocks make wild promises on which you cannot rely. They promise abundant and clean energy, but can they provide returns on investments? Life would be simple if you could avoid energy stocks altogether, but where will we be without affordable gasoline, heating, ventilation, air-conditioning, and electricity? The only thing about which there is near certainty in stock market circles, relates to revolutionary changes. Security, economics, and environmental concerns will not allow the energy balances of the past to continue. You can either profit or lose from the fall out, but cannot be financially immune from the phenomenon!
Stocks That Secure National Energy Needs
Stocks of US companies that produce and sell energy within the country are the safest for investors. Clayton Williams Energy, Incorporated (CWEI) is a typical example. As usual, we have no financial interest in this or any other stock mentioned in the article! These stocks do not have the glamour of the biggest corporations listed on a stock market, but they are relatively immune from supply disruptions due to instability in the rest of the world. These entirely domestic producers and sellers of conventional energy do not have the growth potentials of global corporations, but they will not be badly hit by a depreciating dollar.
Since CWEI is a relatively small company, some investors may find companies such as Petro-Canada (NYSE: PCZ) more to their tastes. The company has a market capitalization of over $20 billion. It has sold assets in Syria, and is strongly positioned in North America and in friendly parts of the European Union. The stock is not completely free of influences from adversarial or unstable countries, but seems headed in that direction.