Sam Hopkins - Angel Publishing

Portuguese Renewable Energy

It's no accident that I'm overseas on America's Independence Day. And maybe it's no surprise either that the first tones of Portugal I've taken in on this trip are ones of energy freedom.

"New enterprise, generated by nature..."

So far my Brazilian-accented Portuguese has drawn some strange looks from police officers and shopkeepers as I ask for directions or coffee, but when I read this sign for the national power company's new renewables division this morning, I only had to kick it around in my own noggin to understand.

The new slogan for Energias de Portugal, which trades over the counter in the U.S. as EDPFY, not only exemplifies the transitional energy economy moving Europe from fossil fuels to clean power sources...

It also represents a fresh Age of Exploration in a country that was once one of the most powerful and adventurous empires in the world.

Along with Spain, Portugal is part of a 21st-century Iberian revival that mixes European Union green energy goals with the desire to stand out as individual national economies.

We're seeing that phenomenon kick into high gear in Denmark, Germany, Norway, Scotland, and here in warmer climes too.

Spain's Iberdrola Energy (MADRID:IBE) launched its own Iberdrola Renovables (Renewables) as a separate listing on the Madrid Stock Exchange in 2007. Most of Iberdrola's renewable might comes from the stiff Spanish breeze. Tiny towns and big cities in Europe's southwestern reaches are now getting electricity from wind turbines, and selling their surplus to the grid.

Now EDP is using its own country's strength in wind, hydroelectric power, and the world's largest wave energy array, Pelamis, to chart its course forward.

But here's the interesting thing...

Energias de Portugal Renovables will be based in Spain, because Chairman Antonio Mexia knows the larger Iberian market can be cooperative and competitive at the same time, building a critical mass of companies and generation capacity that will benefit everyone.

After all, EDP has nearly 500 megawatts worth of new capacity in Spain planned for construction in the near term, helping it towards the goal of 10,500 MW worldwide just four years from now.

And you can tap that momentum with EDP Renewables' forthcoming stock listing here in Lisbon, which we anticipate will be highly successful.

Rest assured, we'll keep you up to date on EDP and the entire Iberian clean energy scene with Green Chip Review and Green Chip International.

Happy Fourth,

Sam Hopkins

Investing in China

The stock markets in Shanghai, Shenzhen, and even the technically-foreign Hong Kong exchange are hurting since global credit worries yanked down buoyant investor confidence last fall.

But before the subprime you-know-what hit the fan, China's Shanghai Composite Index returned 393% in just 15 months.That's where Hong Kong investor Zhao Danyang made a mint, enough to let him bid $2.1 million for a New York dinner with the Oracle of Omaha.

Buffett won't pocket the loot... it goes to charity. But Zhao's gusto for market wisdom shows us Communist China is staking its claim atop the world's financial pyramid and desire to rub elbows with the best in the West.

Call it a bubble if you want, but there's a lot more meat on the bone in China's investment story than there was in the domestic dot-com bust of the late 90s.

Economic growth is still ripping ahead at near double-digit levels despite the bearish Dow and other major world indexes, making it not a bubble but a value investor's playground.

As the Wall Street Journal's Robert Frank observed, lunch with Buffett has been won at auction by many of the 77 year-old's Asian fans in recent years:

And many [of the Asian winners] say they wanted to dine with Mr. Buffett to thank him, since they credit some of their success to his investment philosophy. Given his wide influence, and the new value-investing fortunes being made overseas, it's likely that a $2 million lunch with Mr. Buffett today might even look like a bargain in a few years.

The China Investment Landscape

Lots of things will look different in a few years. China a few years ago was ridiculously cheap compared to today, but the market was immature and most foreign investors stayed away both because of prohibitive rules and general skittishness.

China is fundamentally changing. I've seen it for myself on two separate trips two years apart, which seemed like centuries in some areas of Beijing and the western provincial capital of Xining.

First, prices just aren't where they used to be.

Whether by speculative action, adverse weather conditions in major food producers like Australia and the American Midwest, or the increasing prosperity and appetite of Chinese citizens, rice nearly doubled in price from this January to April.

Check out this chart of Chicago Board of Trade rice futures and you see what I mean:

That food jump changes the balance of costs for families. Meal costs are chiseling away at China's household savings rate, which had been known to exceed 40% of gross income.

Even as the air got let out of world equities exchanges, we've seen commodities keep running upwards.

Of course energy commodity prices play a big role too, with more Chinese jumping into cars and off bicycles every year.

Crude Can't Slow China Down

Shanghai Daily newspaper reports that 4.3 million cars were sold in China through May. That's a 17% increase over the same period in 2007.

Homegrown companies like Geely, Chery, and Great Wall motors are vying for top spot against GM (China is now Buick's largest market), Peugeot Citroen's local Dongfeng collaboration, and other foreign giants.

Ahead of the Olympics, Beijing officials have tried jacking up tolls, finally letting fuel prices rise, and even making the capital's motorists alternate driving days in order to cut pollution and conserve petroleum supplies.

But the likes of Zhao Danyang, who manages Pureheart China Growth Investment Fund, and millions upon millions of other Chinese, have made it clear that they'll gladly pay fines or bribes to get around emissions restrictions, customs forms, and even China's One-Child Policy.

Zhao will toast success with Buffett, and then he'll come back to Asia to hunt for more bargains and live the life of the Middle Kingdom's new elite.

Don't let the charts scare you, folks. The best investors always find value, wherever it may be.

Regards,

Sam Hopkins

P.S. Warren Buffett's traveling to Germany and Asia looking for bargains, and that's the mode we're in at Global Growth Stocks, too. I'm taking off Wednesday for a continent-wide research trip in Europe, and Arlene Lingba is going to be our eyes and ears all summer as China prepares to host the Olympics. To get the best on-the-ground info from the both ends of the world economy, sign up for Global Growth Stocks today.

Brazilian Ethanol

Brazilian sugar refiners are ready to satisfy America's energy sweet tooth.

Here's what I mean, and why the Brazilian ethanol recommendation noted below is about to explode.

Finally, Free Fuel Trade

If knee-jerk reactions could power cars and planes, the world's politicians could replace fossil fuels in a matter of months.

Early in June the United Nations World Food Summit turned into a tag-team tirade against biofuels, with Egypt's Hosni Mubarak and Mexico's Felipe Calderon blaming crop-based energy sources for food riots at home.

There's a kernel of truth there, but developing world demand for food is at record levels because of human consumption, not just biofuels.

In fact, The Council of Economic Advisers and the U.S. Department of Agriculture estimate the total global increase in corn-based ethanol production accounts for only about 2-3% of the recent increase in global food prices . Truth be told, food prices are rising for the same reason as oil prices—rapidly rising demand. And we haven't even addressed the fact that oil prices have risen over 4,000% since 1973, while corn prices have risen a mere 120%. But I digress.

Brazil's Thriving Ethanol Industry

Brazilian President Luiz Inacio Lula da Silva rightly called the huffing and puffing of Mubarak and Calderon an "oversimplification," and added that he is "not in favor of producing ethanol from corn."

That's because Brazil's ethanol industry has been going strong for three decades and is producing sugar cane ethanol with an energy balance 7 times what corn returns.

Brazilian ethanol also costs less to distill from cane to automotive fuel than corn ethanol... about a full third less, at 22 cents per gallon compared to 30 cents for the U.S. stuff. And there are other solutions that haven't even entered the mainstream yet.

I've traveled around South America and heard optimism for sugar beets, jatropha, and other feedstocks you may never have heard of.

And you haven't heard of them because American politicians have been doing their best to keep them off your menu of energy options.

In fact, Congress is penalizing Brazil for getting biofuels right, to the tune of a 54 cent-per-gallon tariff.

How's that for free trade?

Well here's what's going on right now: Corn ethanol is now so expensive—around $2.80 per gallon—that even after adding 54 cents to Brazilian ethanol's $1.87 market cost, it still comes out at a price advantage to the main U.S. biofuel.

Brazilian Ethanol is Ready to Break Out

That's why we think this company's stock is going to explode.

The American electorate is fuming as gas prices keep ticking upwards, and a few politicians are now responding with a common sense policy change—removing, or at least lowering, the tariff on ethanol imports.

Democratic California Senator Dianne Feinstein says "given the record oil prices and the limited supplies of domestic ethanol," charging 54 cents per gallon more for Brazilian biofuel "makes no sense. Judd Gregg, a Republican from New Hampshire, agrees, so he and Feinstein launched a measure in the upper house to strike the absurd subsidy.

Record flooding in America's corn-producing heartland this summer just adds to the case for energy options.

After all, "energy independence" doesn't mean shutting out the best technology from other parts of the world. It's more about having multiple cards to play when something goes wrong in the energy world.

Whether it's escalating attacks in Nigeria or flooding in Iowa, far-flung parts of the globe are now tied through energy supply and demand.

"The Ethanol Business Has Completely Changed"

The Wall Street Journal says Brazilian ethanol exports should come in at around 1.27 billion gallons this year, up 37% from last year's total.

Most of that will go to the United States, with or without a tariff cut. But how will the Brazilians benefit if we drop the 54-cent innovation tax?

"I would say that without any tariff, we would export around two billion liters (527.7 million gallons) more this year and with a lower tariff, around one billion," one official at Brazil's Union of Sugarcane Industries, told the Journal.

Now, my colleague, Nick Hodge, just back from the Renewable Energy Finance Forum on Wall Street, tells me the sense on the Street is that Brazil is going to ramp up production whether or not we're smart enough to drop the duty.

European markets are now clamoring for sugarcane ethanol, and the same goes for ravenous developing countries like China and India.

"Over the last 10 days, the ethanol business has completely changed," Martinho Seiiti Ono, one of Brazil's biggest ethanol brokers, said over the weekend.

Indeed, the whole energy business is in flux. There are plenty of ways to profit as politicians scramble. We'll keep you up to date with the latest.

Regards,
Sam Hopkins

P.S. The fact is that most of the winning power innovations are coming from foreign markets these days. Whether in Brazil or Norway, Green Chip International is delivering real returns with new energy ideas, even in today's bearish market. To learn more about our Brazilian ethanol play that's about to break brand new highs, click here.

Investing In Safaricom

Nigeria is mired in oil turmoil, and Zimbabwe's elections just turned bloody again. But regional growth is at 30-year highs and has room to run.

That's why today I'm telling you to buy Africa.

Across Africa, outbursts and opportunities pose huge potential for risk and reward to the international investors swarming in. Here's how you can make money in African investments.

The Safaricom IPO and Other African Investments

Just ask yourself, when was the last time you got in line at the bank... to buy stock?

Well that's just what hundreds of thousands of Kenyans did this month, snapping up shares of mobile phone operator Safaricom for just 8 cents a share. It's sub-Saharan Africa's biggest listing ever, with eager investors valuing the company at $3.68 billion.

Safaricom is important to Africa's developing markets in more ways than one.

First, the company is run with a 25% stake held by Kenya's government, and 40% by U.K. mobile phone giant Vodafone (NYSE:VOD). This cooperative ownership bucks the competing trend of state expropriation and mismanagement that has proved disastrous in Zimbabwe and other countries.

Even though about 300,000 Kenyans were displaced and some 1,200 died in ethnically-charged violence this past January, Safaricom's South African CEO Michael Joseph decided to go ahead with his IPO plans.

The listing didn't go ahead just despite the violence, but even a little bit because of it—trade and transparency are increasingly seen as the best antidotes to political disorder in Africa.

This is a new model for a continent that has usually been treated more as charity case than investment opportunity in global financial circles (just a couple of years ago I strongly criticized Bloomberg News for featuring Germany as its own section of the world economy while all of Africa didn't even merit its own page on the website).

Joseph told the Economist recently that getting phone service to the underprivileged in Africa "has been hugely more efficient than aid."

In Kenya, real people are taking ownership of a company that helps their lives through communication and even financing. And they don't even have to go to board meetings.Consider that over 85% of black-owned businesses in Africa count a mobile phone as their only line of communication, so mobile telecoms directly stimulate trade in the massive informal economy.

On the individual level Safaricom is enabling customers to exchange money and even make mortgage payments by secure text message with its M-PESA service, tying telecommunications to transactions in a revolutionary way.

So Africa has built-in market momentum with technologies like mobile phones that allow masses of people to rise out of poverty directly into today's information society. Whether or not they buy Safaricom stock, users are participating in a next-generation boom.

From 20,000 customers in 2000, Safaricom now has an astonishing 10.5 million users. That's because chief exec Joseph adjusted to demand for pre-paid customers who carry no credit risk, and his company bills by the second to save users valuable pennies.

Credit risk is sure something hot on the lips of western marketeers these days, and we see in Safaricom a real plan to avoid the kind of hit developed markets are reeling from. So whether with technology or thoughtful business plans, African companies can clearly get a leg up on local growth markets.

However, just as you shouldn't buy every American company simply because Google does well, you have to filter African investments on a case-by-case basis.

But Don't Buy African Investments Blindly

In Zimbabwe, Robert Mugabe is still seen by some as a local counterpart to Nelson Mandela. Having contested British colonial rule from the underground for decades, Mugabe's own presidency has turned into a quarter-century of repression and economic destruction that now makes some Zimbabweans pine for colonial rule.

Life expectancy for males in Zimbabwe is 37 years. Inflation is over 100,000%, store shelves are empty, and the opposition candidate in elections scheduled for early July is taking shelter in the Dutch embassy because hundreds of thousands of his supporters have had their homes burned. The culprits? Roving gangs dispatched by supporters of Mugabe's ZANU-PF political party.

But here's the crazy part... Though the country that was once Africa's breadbasket has been turned into a Hobbesian wasteland as land was expropriated from farmers and turned over to ZANU-PF supporters who didn't know how to harvest, the Zimbabwe Stock Exchange was the best performing stock market in Africa.

That's because of major inside bets by the only people left in the country with real money—party leaders.

So keep your money out of Zimbabwe, but remember that Safaricom is just the beginning of a stream of listings that will come from countries besides the dominant regional power South Africa.

From Algeria to Zambia, African enterprise is on the move. We'll keep you up to date.

Regards,

Sam Hopkins

P.S. You can tap superior returns in Africa, but not just by staring at charts. You need someone looking at politics on the ground, with a sense of history to tell you where the future lies. Global Growth Stocks subscribers are already earning returns all over the continent, with single stocks and funds too. Don't miss out on the next winning play from the world's most dynamic markets. Learn more about GGS and go global right away.

Water Technology Investments

Iowa's got too much, and Australia hasn't gotten enough this year.

In the Middle East, it's a cause for war and a requirement for peace.

Though oceans and rivers are rising, fresh water is becoming as much of a worrisome commodity as sweet crude—and the change in supply of both is creating myriad market opportunities around the world through policy cooperation in water technology.

This week, Los Angeles Mayor Antonio Villaraigosa is just returning from a multi-day trip to Israel.

While in Israel, Villaraigosa met with security officials in charge of protecting Israel's Ben Gurion International Airport. Los Angeles will enlist some Israeli security consultants to help beef up Los Angeles International Airport (LAX), which has been named as a prime target for al-Qaeda.

But what the Los Angeles Times didn't talk about is another major threat area where Villaraigosa is seeking Israeli help: water scarcity.

Israel and Los Angeles Water Technology Cooperation

City officials launched a 20-year, $2 billion strategic plan to combat drought and household water shortages in L.A. and its environs. General Manager of the Department of Water and Power David Nahai calls this "a radical departure for the city of Los Angeles," going on to call it a potential "beacon for other cities."

As far as pacesetters go in the water technology arena, Israel is in the world leadership. From reverse osmosis seawater conversion to efficient drip irrigation, the New Jersey-sized state has delivered top-notch solutions again and again.

That's why Villaraigosa told Israeli business newspaper Globes that the city government has signed a cooperation agreement with the Kinarot-Jordan Valley Technology Incubator, a start-up hothouse focusing on water reuse and desalination technologies.

L.A. will also work with Israel's Mekorot National Water Company, whose former head, Booky Oren, told me and a gathering of green entrepreneurs in 2007 that water technology could soon be the country's top export industry—surpassing even the high-tech field in Israel that gave birth to instant messaging, portable memory, and the Intel Pentium chip during the internet boom.

"Water is the next energy crisis...and a wonderful business opportunity," Oren said when I met him.

With only one source of fresh water, the Sea of Galilee, and other rivers and streams coming from the north in the enemy states of Lebanon and Syria, Israel has never been able to take water for granted.

In fact, current negotiations with Syria over the strategic Golan Heights heavily involve river water rights and a spot of shoreline on the Galilee that Syria claims.

Los Angeles policy makers won't have to fight anyone but their own citizens... Water Police vehicles now patrol neighborhoods in many southwestern cities like L.A. and Vegas, doling out fines for leaky sprinklers and running hoses.

So, as Globes asked, how will collaboration with the Kinarot incubator be implemented?

Kinarot CEO Assaf Barnea responds, "Israeli companies will have an open door for testing technologies at Los Angeles water facilities, which will test and install suitable technologies."

And we expect those technologies to emerge quickly in the form of profitable stock listings.

After all, Israel has more Nasdaq companies than any country but the United States, and more overall U.S.-traded companies than any land but Canada.

As Kinarot and Los Angeles take steps forward together, we'll let you know how to play their progress.

Regards,

Sam Hopkins

www.greenchipstocks.com

Investing in European Stocks

"There's a lot of talk that Europe could be dead," my colleague Andrew told me this morning from Marseille, France.

He's talking about the "no" vote that Irish citizens returned in last week's referendum on a document that would create a more solid structure for the European Union.

The Lisbon Treaty was crafted in the Portuguese capital (and my first stop on a major research junket in July), but its guidelines on issues like trade and foreign affairs have to be ratified by each of the EU's 27 member states.

A few years ago, it was France and the Netherlands that shocked the rest of the continent by rejecting the EU constitution in a referendum.

So the Lisbon Treaty was introduced in 2007 to keep the EU from losing its momentum.

Now, the Irish opt-out has European politicians scrambling—there's a "crisis summit" set for Thursday in Brussels—and European citizens are wondering what will become of their economies.

Amid the uncertainty, European market opportunities are still alive and kicking. Here's why you should still be investing in European stocks.

Europe is Growing in More Ways than One

Even in Europe's wobbly political landscape, retail trade is booming as 12 new member states in the east boost continental numbers.

Official EU number crunchers at Eurostat say that even though retail trade fell by 5.6% in Germany, 3.3% in Spain, and 2.9% in Austria from April 2007 to April 2008, Romania logged a huge increase of 18%, Lithuania came in with a 14% rise, and Bulgarian commerce soared by 10.1%.

I've already detailed strategies for getting your money into these dynamic new eastern European EU member states, highlighting individual stock plays like Central European Distribution (NASDAQ:CEDC).

CEDC is up 13% over the past month against the Dow's nearly 6% decline, because it's capitalizing on exactly the kind of growth in emerging Europe that's keeping the whole EU's head above water.

New EU members are delivering on growth expectations, so it's actually inflation that has European economic captains worried.

Inflation in the 15-nation euro common currency area hit a 16-year high in May, led by food, transportation, and housing.

As part of the global threat of rising commodity prices and easy money feeding a wage-price spiral, the European Central Bank is expected to nudge interests rates up as early as July.

That could hurt investors' appetites for European equities in the near term, but European ETFs are still solid as long-term holds.

Investing in European Exchange-Traded Funds

Warren Buffett ran around Germany last month looking for the kind of companies we focus on in Global Growth Stocks.

"The Oracle of Omaha" went to Europe's dominant economy seeking "...large, well-run companies that we understand right away."

"I'm looking for companies with a long-term, permanent competitive advantage," Buffett said, confirming the value of European industrial power and future growth in the EU, where Germany is a central player.

The iShares MSCI Germany Index Fund ETF (NYSE:EWG) is heavy on such Teutonic titans, like energy company E.On (OTC:EONGY), engineering powerhouse Siemens (NYSE:SI), and pharmaceutical big-shot Bayer (OTC:BAYRY).

Since E.On and Bayer both trade only as over-the-counter American depositary receipts (ADRs), I recommend adding them to your portfolio by purchasing EWG shares so you avoid liquidity problems.

The iShares MSCI Italy Index ETF (NYSE:EWI) holds big international names like energy company Eni (NYSE:E), and auto maker Fiat (OTC:FIATY) in addition to more localized firms such as Telecom Italia (NYSE:TI).

The current downside to investing in European blue chips is that they're in the doldrums along with the Dow. It's not the Lisbon Treaty, but sluggish consumer sentiment and tightened credit that's hurting most now...

But there's plenty of upside for those who believe, as I do, that European economic growth and EU integration will overcome Ireland's recent rejection of union plans.

The Lisbon Treaty must be ratified by all 27 EU member states by the end of this year. We'll keep you up to date with what happens, and tell you how to play it.

Regards,

Sam Hopkins

P.S. - Global Growth Stocks subscribers will get first crack at a slew of promising European recommendations made straight from Sam's European trip next month. If you sign up, you'll also get exclusive multimedia reports and word from companies the GGS portfolio has already played for gains. To learn more, click here: http://www.angelnexus.com/o/web/6326

UN Biofuels Food Fight

Dear Friend,

Sam Hopkins originally wrote the following article for Green Chip International premium subscribers, but the second I read it I told Sam he hit the nail right on the head and we had to get it to a wider audience.

The long and short of it is that renewable energy investment can be dizzying. As Sam tells here, politicians are now assailing biofuels as a "hazardous distortion" of the international food trade and even as a "crime against humanity."

But real insight and advantage comes from looking at the big picture and investing with the world in mind.

Sam's going to be over in Europe very soon, visiting companies and exploring new technologies. He'll tell Green Chip International subscribers about them all, with emphasis on ideas that will be lucrative for years—not just until the political breeze changes direction.

Regards,

Jeff Siegel

A Biofuels Food Fight at the UN

If knee-jerk reactions could power cars and planes, the world's politicians could replace fossil fuels in a matter of months.

At the beginning of June, the United Nations World Food Summit turned into a tag-team tirade against biofuels.

At home, leaders like Egypt's Hosni Mubarak and Mexico's Felipe Calderon are dealing with riots over skyrocketing food prices—increases that many market observers blame on interest in growing crops for fuel rather than human consumption.

I don't need to remind you, but last year around this time you could pick up any major newspaper and read about the wonder and promising riches of ethanol and biodiesel.

Now, politics is turning heads of state against ethanol and other fuels, even though most countries have no better alternative proposals.

At Green Chip Stocks and Green Chip International, we've always promoted the order of operations that will get us off of fossil fuel addiction...

First, reduce consumption.
Second, start investing in solutions to fill lower energy needs.
Third, bring those ideas to market and let technologies and efficient methods compete.

What happened instead was a frenzy to plant as much corn (or sugar, or palm trees) as possible while speculators bid up prices on the world's commodity exchanges.

That market mania—not biofuels being a rotten proposition—is what got us riots.

Biofuels are especially not a bad idea where they are maximally efficient, like in Brazil.

That's where we've recommended Cosan (NYSE:CZZ) instead of chasing corn-based opportunities from North America that produce far less fuel per acre than Brazilian sugar-based ethanol.

Corn is also more water intensive and has far less of a track record than Brazil's national Pro-Alcohol program.

"I am not in favor of producing ethanol from corn," Brazil's President Luiz Inacio Lula da Silva told the gathering of the UN's Food and Agriculture Organization.

He also called blaming biofuels for high food prices an "oversimplification," which we agree with completely.

The resistance of countries with heavy farm subsidies (like the U.S.) to importing more efficient biofuel supplies from Brazil not only hinders fuel progress, it also runs completely against the core tenets of free trade and comparative advantage.

So that's why we're sticking with Cosan and eschewing more speculative, wasteful fuel companies. We are very bullish on household electricity resources like wind energy and solar, and of course technologies to reduce consumption.

But we will never sway in the breeze like political leaders or fickle speculators. Green Chip International is about investing in long-term solutions, and that's how you get real long-term profits.

Kind regards,

Sam Hopkins

P.S. We're coming out with two new GCI recommendations in the next week, based on Europe's booming renewable energy industry and my upcoming trip to see progress across the pond, first-hand. Don't miss these winning plays and my on-location reports throughout July. Sign up for GCI today.

Climate Control Stocks

NEW YORK, NEW YORK: Wall Street's gone cold, but New York feels like a furnace.

Major market averages in the U.S. iced over Friday and Monday as unemployment, oil prices, and yet more sub-prime fallout hit investor confidence.

Meanwhile, temperatures jumped to nearly 100 degrees Fahrenheit in much of the Northeast.

Today, let's look at how you can beat the heat and beat the Street at the same time with climate control stocks.

Cooling off Consumption

We Americans are as addicted to climate control as we are to oil.

But even though both of those dependencies are hard habits to kick, soaring energy prices mean consumers are at scrambling for new, cheaper ways to get their fix.

The government wants you to dial down your consumption too...

That's why the U.S. Department of Energy and Environmental Protection Agency launched the Energy Star program to highlight simple changes in managing home energy use.

Buying a programmable thermostat that lets your residence heat up a little more while you're gone and cools it down by the time you get home can save you a ton.

Energy Star says you can expect a drop of around $180 a year in bills—that's nearly 20% of the total $1000 the average American household puts towards heating and cooling in 12 months.

It's not just about savings, though.

Since Energy Star gives its official seal of approval to certain devices, the companies that make leading technology for programmable thermostats, efficient washers and dryers, and a litany of other devices, stand to gain big in the new energy economy.

Climate Control Stocks

Tops among the companies whose devices Energy Star recommends is Honeywell International (NYSE:HON), the world's leading producer of thermostats.

Honeywell has been around since 1885 after its founder created the "damper flapper," an ancestor to the modern thermostat system that regulated airflow from furnaces once a certain temperature was reached.

Now, Honeywell's engineering prowess has diversified into aerospace applications, and you can find Honeywell products all over the world.

You can also find Honeywell's share price all over the chart.

The company has traded like the tides, surging and then retreating between $54 and $62 per share for most of the past year. It's been dizzying for long-term investors, but the good news right now for market watchers is that we're at a cyclical trough.

If Honeywell stays true to form, you could easily ride a 15% upswing in Honeywell in just the next eight weeks or so.

But since Honeywell is less of a pure thermostat play than it used to be, let's turn our eyes across the pond to the United Kingdom.

A Hot Stock Keeping the U.K. Cool

That's where we find Invensys, which is near the top of the Energy Star recommendation list and also the leader in indoor climate plays from a stock performance standpoint...

Invensys plc (LON:ISYS) has seen a share price gain of over 25% in the past half-year.

In fact, London-based Invensys is about to join the FTSE 100 list of British firms with the largest market caps.

This is a certified international blue chip whose base is energy efficiency and the booming market for cost-cutting products.

What's more, Invensys may have a leg up in many emerging markets that are now kicking their cooling systems into high gear—Singapore and Dubai are said to be the planet's top A/C addicts in the 21st century.

If you're already trading international stocks with an online broker like E-Trade or a traditional brokerage like Euro Pacific Capital, Invensys is your best long-term bet on the household efficiency trend while temperatures climb around the globe.

Stay cool,

Sam Hopkins

P.S. If you're not trading in London or Paris, don't worry—there are countless American Depositary Receipts right on Wall Street that let you tap international market potential without changing currency or opening new accounts. Global Growth Stocks subscribers know how lucrative ADRs are... double- and triple-digit gains have become the norm for our portfolio. To learn more, check out GGS and go global today!

Green Hotels

First off this week, I want to thank those of you who put your two cents in about my column on energy efficient transportation and how higher oil prices are squeezing companies and consumers alike.

I love to see comments like the one here from Captain Lindsey Powell, who flies a Boeing 757 for a living. Lindsey gave us a pilot's-eye-view on air travel, with the most current numbers you'll find.

"As a Captain of a Boeing 757, this week I flew 180 people from Washington to LAX. We burned 26,000 pounds of fuel (3,800 gallons) at a cost of about $14,000 total fuel bill. This equates to $78 per person for fuel. Another $1 per gallon would add another $21 per person each way on this full flight.

Compare this to driving the 2600 miles alone, you would have to get over 100 mpg to burn the same 21 gallons per person.

It's still an efficient, albeit stressful, way of travel."

Thank you so much for your input, Lindsey. It's one thing to write about market movements, but it's quite another to get the scoop from the cockpit.

If you want to make a point about a Green Chip Review article that hits close to home, please avail yourself of the "Comment on this Article" link right at the bottom of this page.

Now, on to this week's topic: green hotels... where we look at travel from a different angle.

The Push Toward Green, Energy Efficient Hotels

If taking a vacation meant nothing but traveling, no one would go. Time spent in on plains, trains and automobiles takes its toll on the body and mind, and by the time you get from point A to point B you just want to kick back and relax.

But the fact is that even when you're lounging around on the beach or sweating out your stress at a spa, energy plays a role in your holiday.

Like airlines, hotel chains are facing stiff headwinds.

Consumer confidence is down and fuel costs make vacations prohibitively expensive for many

Energy costs for facilities—especially ones with low occupancy—are squeezing margins

Water supplies in many regions are meager, forcing hotel usage cuts

Oppenheimer Funds just downgraded three major hotel chains based on the above factors and relatively weak international growth to balance a U.S. slowdown.

Marriott International (NYSE:MAR), Choice Hotels International (NYSE:CHH), and InterContinental Hotels (NYSE:IHG) were all moved from "outperform" to "perform" on June 4.

So in the near term, these companies' stock prices may trade within a range dictated by how well they can surmount profit obstacles. The long-term picture is good, though, for ones that establish comparative advantage in energy and water efficiency.

Going Green: Why Every Water Drop Counts in Hotels

If you've stayed in a hotel recently, you may have seen a new note hanging next to the classic "Do not disturb" tag.

Many major hotel chains are now gently encouraging guests to reuse towels to cut down on water for laundry use. If a towel is too soiled to reuse, toss it on the floor. If not, hang it on the door to dry.

Hotels are also purchasing front-loading washing machines, which use 40% to 60% less water and between 30% and 50% less energy than top-loaders.

You can imagine the reduced headache this leads to for resort managers in U.S. dry spots like Las Vegas, and internationally at Dead Sea resorts in Jordan and Israel.

Though Memorial Day travel volume seemed robust here on the American east coast, the colliding threats of recession and inflation mean the time to make efficiency investments and stay competitive is now.

Marriott International has plans to reduce energy and water usage at its hotels and resorts by 25% in coming years. Marriott is also installing solar power units at 40 of its hotels, with more such improvements to follow.

Outside the suites, Marriott inked a deal in April with Brazil's Amazonas Sustainable Fund to donate $2 million for the protection of 1.4 million acres of rainforest.

That points to a separate but important effort by executives to appeal to green consumers. by building a brand tied to corporate social responsibility.

There are also a plethora of smaller hotels that, being more nimble and not having to roll out efficiency measures or buy devices for dozens of buildings, have joined the Green Hotels Association to tie travel to a zero-carbon lifestyle.

You can find a list of these hotels, motels, and other inns at www.greenhotels.com.

As for the big boys and stock buys, Marriott (NYSE:MAR) looks appetizing right now considering its efficiency enhancements. It's trading near three-year support levels just above $30, and even though Marriott's Q2 revenue-per-room forecast was recently revised downwards by 2-3%, we should see recovery by 2010.

What are you looking for in green travel trends? Let us know.

Happy trails to you,

Sam Hopkins

P.S. - In the Green Chip International portfolio we're not just looking at energy producers but companies that play smart with power, in travel, food, or whatever industry you can think of. Fact is, energy prices impact it all, and first movers will be the ones who survive the shakeout. To learn more, join GCI today.

Canadian Investments

MONTREAL, QUEBEC: Sometimes economic autonomy sounds pretty darn appealing.

In the first quarter of 2008-Quebec City's 400th anniversary year—Canada's national economy actually shrank.

But the French-speaking majority here has to balance separate policies on such key issues as immigration and education with the knowledge that western Canada's resource wealth is boosting every Canadian's dollar.

You may pay for your cup of coffee in French, but Canadian coins still bear Queen Elizabeth's image, and they've skyrocketed in strength relative to the greenback.

The linguistic divide has long been a top issue in Quebec's desire for autonomy and even separate nationhood—as recently as the 1970s three out of every four Quebec residents spoke only French.

These days, Quebec's leadership is teaming up with English-majority Ontario in its latest tussle with the federal government in Ottawa.

It's part of a political tug-o-war that international investors must understand if they want to make money from Canadian investments.

Canada Before There Was a Canada

"We were building Canada before there was a country called Canada," Ontario's premier Dalton McGuinty told reporters on Sunday.

Before the process of Confederation turned British North America into the Dominion of Canada in 1867, Ontario was Upper Canada and Quebec comprised most of what the British called Lower Canada.

Over the weekend, McGuinty and counterpart Jean Charest of Quebec teamed up to mark Quebec City's anniversary and lambaste the national government's Conservative leaders over what may be modern Canada's greatest economic advantage.

That's because they see it as a liability.

They're talking about the development of oil sands in western Canada, namely Alberta, and a Quebec-Ontario agreement to install a cap-and-trade system to limit emissions to 1990 levels.

Federal proposals differ from the Kyoto-oriented Quebec-Ontario plan, placing 2006 emission levels as the basis for future cuts instead of 1990.

A shouting match has erupted between McGuinty and Charest on one side, and the Conservative federal Environment Minister John Baird on the other.

"I think it's more about talk and political posturing than cutting greenhouse gas emissions," Baird said on Sunday, bringing about the provincial heads' fiery words in Quebec City.

Well, political posturing is something we know well down in the United States—especially in this election year.

And recent statements by Canadian market experts say that whatever economic punch either the Liberal or Conservative parties in Canada can deliver may be offset by a slowdown south of the border.

Economic Autonomy... From the United States?

Legendary American oil man T. Boone Pickens says he remembers sitting in the Calgary Petroleum Club in 1967 as the Canadian government announced its first investments in the Athabasca oil sands.

Back then, oil was five bucks a barrel, and heating up the bituminous dirt there for heavy crude seemed ridiculous to many until very recently.

Roll the clock forward to 2008, and Alberta has already taken in 352 million Canadian dollars in oil, gas, and oil sands leases so far this year. British Columbia surprised many in late May by announcing that it actually surpassed Alberta's windfall with its own record $441 million bump.

The Canadian dollar is now considered by many to be a resource currency—backed not only by the full credit of a sovereign government but also by the black gold being processed out west.

Canada is also the world's top uranium producer, with a full quarter of global output.

Nevertheless, a Yankee slowdown will drag on Canada's wealth. Even though purchasing power is up on the consumption end with the rising loonie (the bird-based nickname for the Canadian dollar), 87% of the country's exports go to the U.S.

Is that a reason to stay out of the Canadian market? Hardly.

Some Canadian Investments to Consider

We've been bullish on Canadian investments for years here at Wealth Daily, with top holdings in each of our premium portfolios capitalizing on industries from oil sands to organic food.

And for a simple ETF angle, the iShares MSCI Canada index fund has been an insurance policy for smart investors over the past year...

NYSE:EWC is up over 14% in 12 months versus the S&P's double-digit decline.

A broad variety of holdings like Bank of Nova Scotia (NYSE:BNS), Blackberry makers Resource in Motion (NASDAQ:RIMM), and natural gas behemoth EnCana (NYSE:ECA) mean you have a line on alternating growth trends as Canada moves forward.

By the way, the U.S. won't drag forever, and Canadian GDP growth is expected to triple again by 2010.

The time to go long Canada is now.

Regards,

Sam Hopkins

Oil Production in Africa

Italy just started its new era in Africa.

Italian fascist troops were vanquished in the Sahara during WWII, and Rome's control of swathes of the continent ended as Mussolini was lynched in Milan.

Now, more than 60 years later, Italy's national energy giant Eni (NYSE:E) is ushering in an era of Italian involvement in oil production in Africa...with $3 billion invested into Congolese oil sands.

Oil Production in African: The Third Period of the Oil Game

The world's love affair with oil has run in a few distinct phases:

Find it (bubblin' crude)
Use it up (gas guzzlers and suburbs)
Scramble to find more (oil sand and shale)

Western oil companies have put billions into Canadian oil sands.

Those unconventional reserves made no sense to exploit just a few years back, but once oil broke $40, then $50, then $60 a barrel, billions of bucks came flowing in.

Now we're upwards of $130, and non-traditional crude sources get more attractive with each NYMEX futures increase.

Within the past several years we've also seen the likes of ExxonMobil (NYSE:XOM), Chevron (NYSE:CVM), and several national oil companies cozy up to relatively untapped traditional crude sources...

Places like Libya, Angola, and Kazakhstan are drawing the dollars for exploration and major pipeline construction, as Nigeria's oil industry teeters on the brink of chaos and many South American countries turn hostile to foreign management.

However, in the Republic of Congo, Eni's new plan for non-traditional crude recovery includes an all-encompassing community energy approach.

Eni Oil Production in Republic of Congo

The Republic of Congo (also known as Congo-Brazzaville), is smaller than the neighboring Democratic Republic of Congo, which used to be known as Zaire.

But Congo-Brazzaville's oil endowment is sizeable, with the continent's sixth largest production and increasing levels of natural gas output to boot.

Eni expects to recover 150 million barrels of oil equivalent on an investment of 3 billion U.S. dollars over four years.

That money isn't just going to Canadian-style tar sand extraction, though.

The investment period of 2008-2011 also includes Eni's Food Plus Biodiesel program, which will plant palm trees on 70,000 hectares of Congolese land.

Some 10,000 people are expected to be employed by the project, and their work will produce 250,000 tons of biodiesel per year.

That's after the palms provides vegetable oil that can meet all domestic demand.

In terms of household energy, Eni is using natural gas byproducts of oil sand processing to run a power plant that will generate 80% of the country's electricity requirements.

It's the kind of broad view that's necessary today, not only from an energy standpoint but also as part of a sound investment approach... many oil companies have failed to keep locals happy, and they've paid dearly as we're seeing in Nigeria, Ecuador, and elsewhere.

In the Global Growth Stocks portfolio, we're taking the broad view too.

That's why every single international energy stock we hold is up by more than 45%.

We're playing the worldwide growth trend from several angles and several geographical locations, and the winners just keep coming.

Check out Global Growth Stocks today, and make sure you don't miss another winning stock!

Sam Hopkins
www.energyandcapital.com

Energy Efficient Transportation

The great American writer Paul Theroux once said, "Travel is only glamorous in retrospect."

These days, energy costs figure in to make a vacation seem anything but glamorous or carefree, and energy-intensive tourism companies have gotten hit hard.

But with new energy efficient technologies being employed almost daily, we see a niche where smart investors can make serious money.

Profiting from Energy Efficient Travel Stocks

No one's thrilled that American Airlines (NYSE:AMR) is starting to charge for pretzels and checked luggage. But high-flying transportation companies are none too thrilled about the pocket pinch that's leading to those cuts.

AA is trying to promote its Fuel Smart program, which they say saves nearly 70 million gallons of fuel a year by turning off engines during taxiing and cutting back on heavy food carts.

It's the same squeeze that is hurting fossil-fuel freight trucks and bus systems down on the ground in the U.S., forcing cuts wherever they can be made.

And expensive oil is also choking airlines outside of the U.S.—Air New Zealand just dropped its 2008 earnings outlook to a full 25% below last year's total.

They're replacing Boeing 747 jumbo jets with more energy efficient 777s for the London-Los Angeles route, and we're sure to see the Kiwi national line make many more tehnological changes to pad its profit margins.

As in almost any industry these days, the companies that are alive in a few years will be the ones that wisely invest in efficiency now.

Flying While Fighting Fuel Drag

At the Berlin International Air Show this week, airline fuel analyst Bob Mann told the Associated Press he estimates that "at current fuel prices it would require a 20 percent increase in revenue, accompanied by a 20 percent reduction in capacity for US airlines, to generate economic returns."

You don't have to be an economist to know that's darn near impossible to achieve, especially with a recession still hanging over everyone's heads.

So we turn now to a man whose coffers are sufficiently padded...

Richard Branson, the eccentric owner of Virgin Atlantic Airways, Ltd, has long been known for his antics like dropping dollars as he floats in a balloon over crazed audiences.

These days I bet Branson's clutching his airborne bucks tight.

With oil as 30%-50% of any airline's operating cost and oil rising towards $150, Virgin hopes to make a dent at least in practical testing.

The company flew a 747 powered partially by palm oil from London to Amsterdam this February.

That was the first airliner to burn biodiesel, but there may not be much more of that anytime soon.

David Kaminsky Morrow of industry magazine Air Transport Intelligence said in Berlin that serious use of alternative fuels in air travel "is something that we'll see in the longer term. It's not a simple exercise to take kerosene out and put something like sunflower oil, or whatever, in."

No one's saying the switch will be easy... narrow-bodied designs and aeronautical advances far beyond the knowledge of your humble editor will have to be made.

And, frankly, the first stop for many manufacturers and airlines alike will be coal-to-liquids technology, which was put to large-scale aeronautical use by the German Luftwaffe in World War II as the Nazis were isolated from oil supplies.

But we've still got a biofuel play that will take off with renewable energy progress in the skies.

Brazil: Sugar in the Sky?

Long-term investors should consider Cosan (NYSE:CZZ), the top international refiner of sugar and a leader in sugarcane-based ethanol.

Cosan is headquartered in Brazil, an economy that is booming and has turned around many national businesses over the past decade. Among those is aircraft manufacturer Embraer (NYSE:ERJ), which is known for making smaller planes (you may have taken one on a short connection), and used to be known for making small change for investors.

The combination of Embraer, Cosan, and even Brazil's national oil company Petrobras (NYSE:PBR) which has huge biofuel investments, give Brazilian ADRs the trajectory they need to top your list of smart airline stocks.

Next week, we'll look at some tourism trades down on the ground that will let you capitalize on the greening of hotel chains and resorts.

Until then,

Sam Hopkins

Green Lifestyle

The energy crisis the world now faces isn't just about money.

It's not only a pain in the wallet but a pain in the neck to navigate your way through irksome traffic and hostile lines at the pump.

And, in my experience over the past several months, the changes afoot in the way we fuel up are becoming more healthy, not only from an environmental or economic standpoint...

They're better for the soul, too.

A Sigh of Energy Relief

My life as a motorist may have come to an end unceremoniously, when someone plowed into my Jeep overnight back in September of last year.

But in the preceding months I found myself cursing my commute more and more.

Not because the trek to work was long, mind you, but because it was very short.

I didn't do the calculations exactly, but I'm almost positive I was burning more gas getting up into the parking garage than I was gliding down the slight hill towards the Chesapeake Bay here in Baltimore.

It was ridiculous, and I wanted a way out that wouldn't involve me taking a huge financial hit or getting any ribs cracked.

That late-night hit-and-run was a blessing in many ways.

I paid off repair debt accrued over the year prior as I complied with state inspections ("Why couldn't my deft demolisher have done me that favor before I got a new exhaust system," I thought).

I also handed in my parking pass and got familiar with the bus system, and I'm building a bike with the help of fine folks at a local collective called Velocipede.

Every time I glance up from my magazine or iPod and see the price of unleaded as my bus goes past a gas station, I shake my head in disbelief.

And I immediately feel a real sense of liberation.

I certainly don't expect the diesel truckers of this nation, or most commuters, or anyone for whom driving is an inescapable part of life, to share my glee right now.

But I do expect that as citizens and consumers we are all biting our fingernails at what the flow of American life will be like in five, ten... or even just one year from now.

It's not just something to ruminate on, or a hypothetical situation.

What People Assume

The International Energy Agency came out Thursday with an announcement that significant downward revisions are likely to be made this year after an extensive survey of the top 400 oil fields in the world is completed.

Before, the IEA just looked at demand from you and me and our countries, and calculated where they thought prices might be heading or how much oil would be slurped up given economic conditions.

Now, they're finally looking at what's underground.

IEA Chief Economist Fatih Birol said that the outcome of his agency's new approach may be that "the oil investment required may be much, much higher than what people assume."

"This is a dangerous situation," he continued.

As someone who's extricated himself from the oil economy in the most direct way, I say it's an advantageous situation.

Travel by mass transit can get me almost anywhere in the world (including to Europe this summer for a renewable energy company research trip that I expect to net several more winners for Green Chip International).

And the advantages are clear to green investors, whether you've ditched driving or not.

Heck, if you've made the adjustment to hybrids or plug-ins, you can keep the car and still pad your pocket!

What it comes down to is this...

Oil broke $130 a barrel this week, and all signs point to $150 from here.

Renewable energy stocks are also pushing higher, and oilmen like T. Boone Pickens are doing what would have been mind-boggling ten years ago—pushing their own billions into clean power.

It may only be for filthy lucre, but the energy transition will come with different combinations of motivation, whether it's one guy who's sick of commuting or another who wants to make billions.

More and more, those personal and financial choices are coming together, and that's what we're all about.

Until next time,

Sam Hopkins

Investing in Energy ETFs

It seems we're nowhere near the top of the market for the OIH oil service ETF.

The International Energy Agency is anticipating worst-to-date worldwide reserve numbers, with investment requirements beyond what major players have on hand.

IEA head Nobuo Tanaka said Thursday that the Paris-based organization will soon provide a "more realistic supply potential" appraisal...

That tells us what we've heard to this point may as well be thrown out the window.

It's a data shake-up that will reverberate for years, not just in speculators' ears but with real fundamental sticklers too.

You see, instead of demand-side tunnel vision, the IEA is finally turning its eyes to what matters—what's underground.

The agency is probing the world's 400 leading oil fields, and no one on the NYMEX is expecting rosy data when the tally comes in.

IEA chief economist Fatih Birol says, "the oil investments required may be much, much higher than what people assume."

"This is a dangerous situation," the lead number-cruncher continues.

But if you're an energy ETF investor, that danger is pretty darn profitable.

Energy ETF Investments Shine

Now, many long-term marketeers get out of a play after a loss of 8% or so, and they're careful not to buy into raging bullish charts.

But Investor's Business Daily's ETF rankings these days are full of winning oil, natural gas, and commodity stocks that are appetizing buys despite their recent run-up.

United States Natural Gas Fund (AMEX:UNG) is up more than 54% on the year through May 22, and PowerShares DB Oil (DBO) has gained 43% in the same time.

Normal IBD logic would say you should observe these tickers from afar and bang your desk in frustration for not having bought in December.

We say it's time to get in.

The reason, quite simply, is chaos.

Where supply and demand should stand alone as factors for weighing investment prospects, the oil industry keeps adding wild cards.

Sure, there's the risk premium added to a straight barrel of light, sweet crude coming out of the ground in places like Nigeria and Iraq.

But the IEA statistical shuffle that's now in the works tells us something far scarier than pipeline blasts or widespread siphoning—even reserves in the safest places are in question.

The numbers just aren't reliable, because the IEA and others have adopted a backwards model where price is extrapolated from demand in top economies, not supply.

Supply, it turns out, is connected to decline rates that lie between 4% and 10% a year. 4.5% is what Cambridge Energy Research Associates estimates, but if Fatih Birol's gloomy tone rings true later this year, who knows what kind of supply drops we'll find out about?

Again, that uncertainty and the fact that oil futures are the textbook example of leading indicators means the only way is up.

There is no countervailing momentum now to counteract a rise, other than politicized pot-shots (suing OPEC while nixing gas taxes and drilling in Alaska may be the perfect storm of foolishness).

You know what, though? Despite or maybe because of all the uncertainty, I am sure about one thing—the bleaker the situation looks for oil junkies, the better oil service companies will do.

That's why I'm super-bullish on oil field services companies, the cowboys who are going to the farthest-flung places and using the newest technologies...

And charging higher and higher prices, because they can.

Buy Oil Services HOLDRs on Dips

When's the last time you heard about an analyst boosting 36 companies at once?

Tuesday, that's exactly what happened.

James Crandell over at Lehman Brothers is overweight Transocean Inc. (NYSE:RIG), raising his price target on that oil service and drilling giant by nearly 7%...

That's even after a 75% climb since last spring.

Being the international market watcher over here at Energy and Capital, I'll tell you that even though the wells may be dryer and harder to reach, there's no shortage of work in the pipeline for Transocean.

Same goes for other top players like Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), and Baker Hughes (NYSE:BHI).

And they're all neatly packaged for you in the Oil Service HOLDRs ETF (AMEX:OIH), which pulled back slightly on Thursday but has room to run.

OIH is a little rich for some people's blood at over $200 per share currently, but consider what you get—a direct tap into the oil industry's last, best hope for capacity increases to offset dwindling production.

I guarantee you don't want to wait for the final IEA numbers later this year to make your move.

Buy OIH anywhere below $215 per ETF unit.

Regards,

Sam Hopkins

Investments in Vietnam

"Here you can really see Chinese socialism," my friend Wang told me.

He gestured with an open palm around us to the streets of Xining, the smallish capital of China's northwestern Qinghai province.

"Chinese socialism, eh?" I thought, but I kept my lips tight.

"Would that be at the Adidas store or the KFC?"

China and Vietnam: From Marxist to Market

You can see it all over the Middle Kingdom—old government-run department stores with bare shelves and outdated styles have given way to western-style showcases of modern fashion and technology—often in the same building.

There's something more jarring than the slew of reports about cranes all around and LCD TV screens advertising luxury to former peasants...

It's hearing about the way things used to be, or seeing someone push rice away and eat only meat, because for generations rice was the only food available.

The point is that you can't understand where a country is going without knowing where it's been.

And in China, along with countries like Vietnam and North Korea that have varying relationships with Communism, the past carries through today and into tomorrow.

And it's tomorrow's opportunities that we're looking for...

China's Economy This Summer

China is dealing with potential triumph and real tragedy in this Olympic year.

Protests and the terrible natural disaster in Sichuan province last week are testing the nation's command and relief networks, as well as its economic fortitude.

On Monday, May 19, officials in Beijing announced the staggering toll of last week's 7.9-magnitude quake:

71,000 dead, buried, or missing

220,000 injured

14,207 businesses seriously damaged

Direct economic losses are expected to total 67 billion yuan, or $9.6 billion.

On the other hand, the Beijing Olympics have created around 745,000 jobs and $40 billion is going towards revamping the capital city alone.

The Chinese economic pendulum swings hard from side to side.

There's no better example than what happened in 1979, when President Deng Xiaoping uttered the key sentence to China's generation of growth:

"To get rich is glorious."

The very fact that the government announced the economic toll of the earthquake—no such number has come out of Myanmar following Cyclone Nargis—shows us China's change since Deng's rule began, just years after Mao's death.

Sure, China still has Five-Year Plans and other centralized national targets...

But the Five-Year Plan that runs through 2011, along with "Constructing a Harmonious Socialist Society," highlights the strengthening of service industries like tourism, environmental protection, and narrowing the growing gap between rich and poor.

These are economic goals any country in the World Trade Organization would assert, even though Mao still smiles gently from many rear-view mirrors and lapel pins.

China's membership in the WTO itself, and its status as one of the world's top economies with double-digit growth, makes it a model for other countries with socialist structures.

Tops among these may be neighboring Vietnam, where GDP growth hit 8.5% in 2008.

Vietnam Investments: Downstream from China

Both Vietnamese residents and outsiders are hoping for a repeat of China's stellar stockmarket rise over the past couple of years—hopefully without the dizzying drop that halved the Shanghai Composite Index from October to April.

The Vietnamese government has already set up a secondary exchange in Hanoi to augment the trading floor in Ho Chi Minh (formerly Saigon). This mirrors what China did in Shenzhen to provide an alternative to the Shanghai bourse.

Now both Shenzhen and Shanghai are on the lips of millions of international investors.

Before those cities became targets for foreign investors, though, foreign manufacturers were moving to China in droves to take advantage of low-cost manufacturing.

So what's happening now? Well, believe it or not, Chinese manufacturers are moving downstream to Vietnam to pad their margins!

Heavy inflation in China from record consumption of food, fuel, and consumer products give us a situation today where execs like Edward Kang of textile maker Ever-Glory International is heading down the Mekong.

Kang told Bloomberg that he's moved 40% of his production base to Vietnam, where wages are about a third of today's Chinese rates.

"The end of an era in terms of China's mighty export industry has just begun," the entrepreneur opined.

So how do you get in on the ground floor of Vietnam's market, which we have to assume is at the beginning of an era?

First, it's important to note that Vietnam is a fraction of China's size, economically and population-wise. There are some 85 million people in Vietnam compared to 1.3 billion in China.

And Vietnam isn't immune to the same kind of inflation that China has suffered. Vietnamese inflation came in at 18.3% in 2007 but is expected to slow to around 10% in '08.

Vietnam is the world's second largest rice exporter, and with wild price swings we've seen in recent years, that export leadership will impact inflation, interest rates, and investment in the country.

So Vietnamese investment options are very limited right now...

Investments in Vietnam

Even a Vietnam exchange-traded fund still seems like a pipe dream, even though China is highly investible through Hong Kong and U.S. domestic listings.

There is BBV Vietnam S.E.A. Acquisition Corp., which is listed on the pink sheets as BBVUR, but it is headquartered in the Marshall Islands of the Pacific.

There is also the Vietnam Opportunity Fund (VTOPF), another over-the-counter pandora's box that it's better to stay away from.

So what's the best Vietnam angle today?

As I say with many of these frontier markets that are difficult to play with direct stock purchases, you should dive into your portfolio for U.S.-listed companies that are doing early work on the ground to draw revenue.

The world's leading mobile phone provider, Vodafone Group (NYSE:VOD) is a perfect example.

Vodafone, which we're holding in the Global Growth Stocks portfolio, has opened offices in Hanoi and is bringing Vietnam into its worldwide expansion strategy, just as the company has done with many African countries, India, and even in the U.S. with its stake in Verizon Wireless.

Of course, we're keeping an ear to the ground for pure plays on Vietnam to ride the wave up like we did with China, but I will say one thing very clearly: Each country has to be considered by itself through history, economic fundamentals, and goals.

Keep those individual elements in mind, and you will reap major profits in international investing.

Stay tuned,

Sam Hopkins

Norway's Wind Energy Outlook

Norway sure has its extremes.

The days are getting longer and longer this time of year, evening out the gloomy darkness of the long Nordic winter.

In energy there's balance too. Norway's North Sea oil production is expected to drop by 100,000 barrels this year...

But the Norwegian government and local companies are looking towards a future in another abundant regional energy source—Wind power.

Still, we think they need to do more.

Norway's Wind Energy: Gusts Instead of Steady Breezes

On May 15, the Norwegian Ministry of Petroleum and Energy revised its 2008 budget to include a 100,000 barrel-per-day drop in oil production, down to 2.4 million bpd.

Here's the kicker: Norway's not alone in its decline—the U.K., the largest oil producer in the European Union, peaked in 1999.

In fact, 2007 was the year the U.K. turned into a net oil importer, as field decline rates and increasing fuel consumption put the squeeze on native capacity.

Luckily for the companies bringing North Sea oil up and out of the ocean, record high NYMEX and London-traded crude prices have bolstered the bottom lines of firms like Norway's StatoilHydro (NYSE:STO), a longtime Global Growth Stocks holding (and currently a 71% gain).

But we know $125 oil is only good if you can find the oil to sell, and those days seem numbered in the blustery waters of northern Europe.

It's a good thing, then, that Norway recognizes its wind energy potential.

As Deputy Petroleum and Energy Minister Liv Monica Stubholdt said recently, "Norway is among the (world's) most ideal locations for wind power, both on the coast and offshore."

But progress is moving more slowly than it should for a true transitional energy economy to emerge.

That goes for Norway, and its North Sea neighbors, too.

North Sea Countries Waffling in Wind

Last week, I alerted Green Chip Review subscribers to an unfortunate development in the United Kingdom's movement towards lofty renewable energy targets.

Royal Dutch Shell (NYSE:RDS.A), which along with BP (NYSE:BP) announced record profits in the first quarter, pulled out of an offshore wind farm project that would provide tens of thousands of Greater London homes with electricity.

Germany's electricity giant E.ON AG (OTC:EONGY) also got cold feet on the London Array.

Disappointing, considering the London Array has the potential to power a full quarter of all homes in the capital city area when completed.

And that's just a fraction of the total capacity that could come from Germany, the U.K., Belgium, Denmark and the Netherlands...

The German Wind Energy Institute said in 2000 that the total offshore wind bounty among those five nations is equivalent to five times their total electricity consumption.

Five times!

Yet Shell and E.ON have moved on wind in fits and starts, and StatoilHydro's New Energy Wind division is treading lightly with just a couple of wind farm demonstrator projects.

"Offshore makes sense in a way," that division's project head Jan Fredrik Stadaas says. "It is our area of competence."

That echoes what I heard in my time on the North Sea coast of Scotland, where I met with Norwegian oil rig engineer Gunnar Foss back in 2006.

Foss is involved with Canadian firm Talisman Energy (NYSE:TLM) and a deepwater wind pilot project they are working on, taking offshore structural pointers from the oil industry and moving it to the renewables sphere.

This collaboration is essential and encouraging to us energy investors, but the window for offsetting North Sea oil declines with clean energy advances is closing by the year.

We'll keep track of every turn of the turbines here at Energy and Capital, and tell you how to play the next big move.

Regards,

Sam Hopkins

WorldWater & Solar Technologies

Our hearts go out to the citizens of Myanmar (Burma) suffering, and those who perished, from one of the worst natural disasters this decade has seen.

While world governments slowly pry open the sealed society to help prevent further suffering, we have to wonder...

Where will the necessities of life come from?

It turns out, the answer may come from the cleantech sector...

WorldWater & Solar Technologies: A Possible Solution?

U.S.-based company WorldWater & Solar Technologies (WWAT.OB) has experience in dealing with water-related crises. From New Orleans to the Middle East and hopefully soon to Myanmar, they create the solar panels that drive water pumps for many applications.

The panels are also co-generation units, meaning electricity is a byproduct of the water purification and pumping process.

Of course, both energy and water are in desperately low supply—millions of Burmese citizens are only getting drinking water from the falling rain after Cyclone Nargis hit last week.

While the degree of this disaster is escalated by the military government's incompetence, there's a persistent drinking water problem in many rural areas of the developing world that comes from lack of pure, unpolluted sources.

In countries like China and Vietnam, and even downstream in Myanmar, rapid industrialization and lax environmental codes have taken their toll on the water supply.

Asian countries now have some of the foulest waterways in the world—China alone has 16 of the 20 most polluted streams and rivers on the planet.

So for WorldWater, which provided off-grid, movable pumping systems to New Orleans in the wake of Hurricane Katrina, the challenge will be to move the bad water out, while getting good water in.

Water In, Water Out

WorldWater has shipped its water purification modules and irrigation units to Iraq to supply military bases and Iraqi farmers.

In that desert region, optimizing water use and eliminating waste is key. But limited access to clean freshwater isn't a problem monopolized only by desert and third-world nations - it is increasingly a problem in numerous industrialized and wealthy nations as well.

The problems in Iraq may not be dire—an aging infrastructure is better than no infrastructure—but they're in need of attention and investment dollars nonetheless.

That's why Green Chip Stocks (and its sister publications) has implemented numerous tools to give you exposure not only to what's going on in the world of water and cleantech, but how to profit from them as well.

It is certainly an industry capable of delivering good returns through the pipe manufacturers, purification technology companies and more, that will undoubtedly receive increased business as this worldwide crisis unfolds.

But putting money in water is one of those double-bottom-line investments—it has both monetary and societal benefits.

Unfortunately, it may be too late for the unfortunate people of Myanmar, and for their rigid leaders.

And while we'd like to see the government snap out of it and snap up some Worldwater products, we know water-related technologies will soon have their day all over the globe.

Hopefully next time, they'll be implemented before disaster strikes.

Regards,

Sam Hopkins

Investing in Eastern Europe

This is the first of a two-part series international investing guru Sam Hopkins has written on countries that have emerged from Communism to become the most dynamic economies in today's world market. Part One deals with European Investments, and in Part Two we'll look at Asia.

— Brian Hicks, Publisher

Stalin wouldn't approve of decadent Big Macs.

But on a recent trip, from the top of a staircase above McDonald's and across the hall from a casino, I noticed the ruthless Soviet premier's face pointing the way to Prague's Museum of Communism.

Fast food restaurants are just one of a striking set of symbols that exemplify post-Cold War Europe's economic transition. With that in mind, let's take a look at some of the U.S.-listed tickers that have come to us from behind the Iron Curtain.

Eastern Europe Investments: Capitalize on New Capitalism

The Soviet Union, Czechoslovakia, and Yugoslavia are no more. But the countries that comprised them now enjoy some of the world's highest economic growth rates, creating ever-increasing options for investors.

After enduring plenty of economic pain under central planning, Slovakia's new open economy and flat tax plan have brought billions in foreign investment and staggering 8.8% GDP growth in 2007.

With low debt and low inflation they are a model for new EU states, and in turn, the continental body will reward Slovakia with euro accession in 2009.

Let's face it, good national planning makes citizens feel wealthier. We're seeing the flipside of that Stateside these days as Washington's ugly balance sheet has consumers down in the dumps.

But, in former Eastern Bloc countries, optimism rules, and spending on all kinds of goods creates opportunities for companies to move products in and out.

Take Central European Distribution Company (NASDAQ:CEDC), whose base in Poland eases its spread into new European Union member states and the strong euro currency zone.

CEDC, which specializes in liquor distribution, has seen the home-country economy take off too, as the Polish economy logged a robust 6.5% last year.

The result of this regional progress for the company has been a steady and impressive revenue rise, as we see in the CEDC revenue chart below from Morningstar:

Since its founding in 1990 as Carey Agri by intrepid American executives, CEDC has prospered in free Poland and its environs.

CEDC shares have nearly doubled over the past year, and in April the company issued guidance for the coming year that exceeded analysts' estimates, making this a solid hold for emerging Europe exposure in your portfolio.

So what about Mother Russia, the seat of Eastern European power for half a century?

Is Russia Returning to Old Ways?

There's a new president in the Kremlin as of May 7, as Dimitri Medvedev has taken the reins from Vladimir Putin. Putin will stay on as prime minister and head of the new United Russia party, but Medvedev's leadership should bear some of its own hallmarks.

After all, Medvedev is the first Russian head of state to have earned his stripes entirely in the post-Soviet state apparatus.

Most importantly from a business standpoint, Medvedev is also the head of Russia's natural gas monopoly Gazprom.

Russia provides a quarter of Europe's natural gas. That puts Moscow in a position of power, rolling in the rubles and signing a slew of bilateral agreements with EU members and others eager to secure supply.

But there are relics of Soviet times in Russia's new energy economy: central planning and tight control of political opposition.

The Other Russia coalition, headed by chess legend Garry Kasparov, complain of intense government security monitoring and heavy-handed crackdowns on protest marches.

Yet Russia has had 9 straight years of economic expansion and 7% growth in 2007, putting it in the BRIC pantheon of emerging markets, along with Brazil, India and China.

Gazprom is listed on the London Stock Exchange and Russian stocks in the U.S. have enjoyed a sustained rise.

Hefty Gains from Russian Stocks

Shares of Vimpel Communications (NYSE:VIP), Mechel OAO (NYSE:MTL), and the Market Vector Russia ETF Trust (NYSE:RSX) prove that investor confidence in the country has recovered substantially since the Russian debt default of 1998.

Vimpel shares have gained 1107% since 2003 after trading sideways for the five years before.
Mining and steel group Mechel has ridden the Russian wave along with surging worldwide materials demand to a 350% one-year gain.
The RSX ETF is heavy on Gazprom and Norilsk Nickel—both of which only trade over the counter in the U.S.—and since launching in 2007 RSX gained a handy 38.96%.

Hey, the United States is most people's reference point for capitalist wealth, but we still have plenty of kinks to work out. The progress Russia and former satellite states have made in under two decades is extremely impressive, and it's yielded real returns to investors who stayed up on the latest developments overseas.

There are more Eastern European investment opportunities in the offing. Romania and Bulgaria joined the EU in 2007, and most of the former Yugoslavia is at the doorstep. Stay tuned and we'll let you know where to buy in as those stories develop.

Next week, we'll dive into China, Vietnam, and other Asian countries where socialism is still officially the name of the game, but market economies are really driving progress.

Regards,

Sam Hopkins