A few weeks back, I kicked off the Intelligent Investor Series as part of my weekly commentaries. Th...
3 Markets on the Stampede
06/07/2013 8:30 am EST
Successful Investing's Doug Fabian points out three markets that appear to have started new bull runs.
Doug, there are some options out there for investors?
Well, it is important to understand that with the Dow at 15,000, we certainly cannot say that the US stock market is a new bull market. A new bull market is a market that has experienced a 30%, 50%, and in a couple of cases a 70% decline, and now has started to turn.
There are three of those markets that I want to talk about with viewers today. Let’s start with natural gas. Natural gas, at one point in time, was $12 a British thermal unit in the United States. A year ago, it was $2. That is a decline for you from $12 to $2.
We all know the good reasons why, of course, with the discovery and the technology to be able to bring natural gas to all of America. Again, I am not so much suggesting that people would play the commodity in this case...but there are some ETFs that you can access in natural gas, and I think that this is the appropriate time to be thinking about adding that to your portfolio.
Also, clean energy?
Well, clean energy is another one of those areas of the marketplace. Solar stocks, wind stocks, battery stocks were decimated the last two years, even though the market has been moving up. We saw solar stocks go down 70%.
There is an exchange traded fund, the PowerShares Clean Energy ETF (PBW) that fell from $10 a share to $3.60 a share, a 65% decline. In November, it reached its bottom, and we have now seen a turn. What I like about this ETF is it gives you access to about 40 stocks in wind, in solar.
One of the stocks they have in the solar side is Tesla Motors (TSLA), and Tesla, of course, has just had a huge, huge month just in terms of its stock and its production. Everybody loves the vehicle and the like, but I think clean energy has some room to run. And this ETF is trading at $4 a share, but if it got back to its old highs, that would be $10 a share.
We have natural gas, we have clean energy, and your third idea is in Asia.
Well, so much has been written and talked about in regard to Japan. The Japanese stock market has been the worst global equity market in the past 20 years, bar none. It has underperformed. It has had its up and downs. We all know that they have gone through this big bout of deflation.
But recently, with the new Prime Minister and new Bank of Japan governors, they have made this concerted effort to hammer down the value of the Japanese yen. Well, we know on an export-driven economy, this is going to be very helpful for companies like Toyota (TM), like Honda (HMC). It is going to make their vehicles less expensive relative to other vehicles, and it has led to a boom in the Japanese stock market, a 40% move in the Japanese stock market in four months.
Again, in context, bull markets are usually not four months in length. I mean, you usually get a two-year, a three-year, or a five-year bull market. So I am not saying that the Japanese stock market is a good buy today, but I am saying that ETFs are a good way to be able to access Japanese stocks...small-cap ETFs, large-cap ETFs that focus on Japanese stocks.
Japan has the third largest economy in the world and I think it is Japan’s time, so let’s add some of that exposure on a pullback.
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