If you’re a value investor, you must be relishing the opportunities in the marketplace now. Particularly for institutional investors who get paid full-time to invest other people’s money, there really are all kinds of attractively valued securities in the stock market.
Of course, the risk is always that the bear market will keep those securities attractively valued for a long time; but, as an investor, eventually you do have to pull the trigger if you’re going to be making some bets on the future.
I’d like to get away from the day-to-day noise on Wall Street and start looking again to see what sectors of the economy have the most to gain going forward.
It wasn’t too long ago that alternative energy stocks were soaring. Investors were shoveling money into solar energy companies, pollution control companies, and even companies making advancements in batteries. This sector is ripe for another long upward move and I think the catalyst will be a recovery in China’s equity market commensurate with new government incentives at the Federal level.
Also, I’m really starting to believe that there will be a lot of new infrastructure investments over the coming years. Governments love to spend money, particularly when times are tough. I’m not just thinking about roads and bridges; I’m thinking about energy infrastructure and, specifically, infrastructure related to the use of natural gas.
A lot of energy analysts are predicting a marked increase in natural-gas-fired electricity plants and a lot of infrastructure is needed to get the commodity to its destination. The Pickens plans sounds like a really good idea to me. Hydrogen power generation is a long way off and wind and natural gas are commodities that are plentiful, close to home, and significantly cleaner than oil or coal.
So, the future is actually bright in a lot of market sectors. I can’t predict the timing, but I’m going to be focusing on investment opportunities in these industries a lot more over the next few years.