Mad Money, "Boo-Yah"!

I'm not a big fan of Jim Cramer. His CNBC show is too loud and superficial, and he looks and sounds like he's taken a few too many crack hits before going live. But he does have a way with picking winners before they become winners. In his most recent column in New York magazine, he examines "alternative" energy companies:

Face it: alternative-energy stocks have been one huge joke for the past 30 years. Half the companies that fit the “alternative” rubric were scams, designed to appeal to clueless do-gooder investors, and the other half needed a darned fool president like Jimmy Carter to subsidize them just long enough to take our tax dollars and then our stock dollars before they faded into well-deserved oblivion. Anytime anything became close to economically viable, opec simply turned on the tap, drove oil down to some level where the oil-independent saviors couldn’t make a living, and eliminated the competition, unfair and unsquare.

Until now. Now oil’s high and going higher, and opec’s got no spare capacity to bring the price down. The Saudis keep claiming they can pump more, but the figures show otherwise. Every time there’s a terrorist attack on an oil facility (and you can bank on more to come), oil goes higher. Perhaps best of all for alt-energy, most of the areas where oil can still be produced with abundance are either too costly to drill, because they’re in the Arctic or Siberia, or they’re in locales cursed with perma-jihad. Oh, yeah: George W. Bush (George W. Bush!) began pumping alt-energy in his State of the Union address.

And the final paragraph:

Either way, alternative energy makes too much sense now to ignore. I like to think of these companies as energy biotechs, using new technologies to create new products that the big dogs lack the DNA, no pun intended, to develop. I’d buy half a position now, wait for a couple of warm days, and then buy the rest, as Wall Street is still hopelessly negative on the price of energy itself, always thinking we are just a few sunny days away from $40. When you consider that we had the warmest January on record and oil is still hovering around $60, you can bet that we are far closer to our lows than our highs for the next couple of years. Who knows? Soon, we may not regard the group as “alternative” energy but as “cheap” energy, which might in fact be a more accurate sobriquet.

That's a very good point. Wherever you look--at least here on the East Coast--people haven't really changed their behavior in response to the higher gas prices; most drivers still floor their SUVs between red traffic lights, etc. That's because consumers have gotten used to gas prices falling after a period of higher prices, and plenty of voices out there are still telling people that everything will be OK, don't worry, alternative energy companies suck, buy more gas, we're going to drill our way out of this, conservation is for sissies and will actually increase poverty worldwide.

These are the days to begin thinking contrarian.