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Are Solar and Alternative Energy Companies Good Investments?

Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

“The difference between a rich investor and a poor investor is the quality — and timeliness — of his information.” — Bernard Baruch (from “The Maxims of Wall Street”)

With the U.N. Climate Change Conference going on in Paris, suddenly renewable alternative energy stocks like First Solar and Solar City are rallying. Will the rally continue?

Alternative energy stocks, as well as subsidized ethanol producers like Archer-Daniels-Midland, have been hit hard as the prices of crude oil & gas have plummeted in the past year, falling in half. Tesla, the all-electric car maker, has seen its stock flounder this year. It is still unprofitable. Why bother buying an expensive Tesla when the price of gasoline used in regular automobiles is so low?

For now, alternative energy stocks are moving up, but they are not likely to continue to do so if traditional energy prices (gasoline and natural gas) fall. Goldman Sachs predicts that oil will decline to $20 a barrel. I would be surprised, but markets are famous for exaggerating.

Know the signs of the times! Alternative energy and all-electric cars still require heavy federal subsidies. Unfortunately, that trend will continue under the “global warming” hysteria coming out of Paris and the Obama administration.

You Blew It! What I Hate about Giving Tuesday

Were you inundated with demands to give money to your favorite charity, think tank or nonprofit organization on Giving Tuesday? Don’t you just hate made-up holidays? It is bad enough that Thanksgiving, one of the most spiritual and family-oriented of holidays, has given way to names like “Turkey Day” and “Black Friday.” Now we have to endure Giving Tuesday.

The New York Times ran a story about how Mark Zuckerberg and his wife, Dr. Priscilla Chan, are going to give away 99% of their Facebook shares to charity. “Our initial areas of focus will be personalized learning, curing disease, connecting people and building strong communities,” they wrote in an open letter.

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But why do you need to set up an unusual limited liability company (LLC) to achieve these goals through the newly formed Chan Zuckerberg Initiative when there are thousands of for-profit businesses that focus on education, curing disease, connecting people (telephones, email, texting, Skype) and building strong communities?

The fact is that free-enterprise capitalism does a much better job of these goals than any government or non-governmental organization. Mark and his wife could do a lot better job with their billions by creating new businesses that better educate people, cure diseases, etc. Most nonprofits and charitable organizations could be far more productive if they had to cover their costs when they start an initiative.

We will need to see whether the use of the LLC structure instead of a traditional nonprofit corporation or foundation will allow the Zuckerberg family to avoid inefficiency and reap the benefits of investing by trying to do more than merely make philanthropic grants. The LLC structure is intended to let the Chan Zuckerberg Initiative invest in companies, lobby for legislation and seek to influence public policy debates, which nonprofits are restricted from doing under U.S. tax laws. A family spokeswoman said that any profits from the LLC’s investments would go back to the Chan Zuckerberg Initiative for future projects.

Regardless of whether that unusual structure for a charitable organization will attain the desired results, free enterprise apparently needs to do a better job of branding.

Last Call for Best Holiday Gift for Subscribers!

It’s now less than a month before Christmas, but there’s still time to order copies of “The Maxims of Wall Street” — the ideal holiday gift item. Unlike candy or wine, this gift offers a lifetime of sound investment advice with over 800 sayings and dozens of short stories. (The line above from Bernard Baruch comes from the book.) As one subscriber said to me recently, “There’s more wisdom in your book than 4 years of college education!” And there’s even quite a bit of humor in the “Maxims” — see for example page 25, “how to make a million.”

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You pay only $20 for the first copy, and all additional copies are only $10 each. All will be personally autographed, and I pay the postage! I’m offering “half off” because I know “Maxims” makes a great gift for friends, relatives, business colleagues, investors, your favorite stockbroker and money manager. Many people order a whole box (32 copies). The price of a box of books is only $300 postpaid. To order your copies at this super discount, call Ensign Publishing toll-free at 1-866-254-2057 or go to www.miracleofamerica.com/maxims.

Thank You for Joining Me for Another Profitable Year!

I end this Skousen CAFÉ with a big thank you to all of the subscribers to my monthly investment newsletter, Forecasts & Strategies, as we enjoyed another profitable year together. It has not been easy to stay fully invested in the face of a Chinese stock market crash, the slump in oil prices, terrorist attacks around the globe and constant doom-and-gloom predictions. Bull markets climb a wall of worry. But if you have held on, you are ahead of the game.

I’d also like to thank all of you who came to my annual FreedomFest show in Las Vegas in July and witnessed the biggest turnout ever (2,500 attendees) and major media coverage. I also hope you will join us next year at the Global Financial Summit in The Bahamas, March 13-16 (gfs.freedomfest.com), and FreedomFest, July 13-17 (www.freedomfest.com). Both events are great ways to learn, network and celebrate liberty.

Upcoming Conference

Special Announcement: Subscribers to the Skousen CAFE should be happy to know that for the first time in two years, I am hosting the Global Financial Summit, a special private investment seminar, in The Bahamas. The focus will be on “High Income & Fast Money Investing” — combining my two most successful trading services!

My “All Star High Income & Fast Money” experts for this exclusive private meeting will include Alex Green, investment director of the Oxford Club and editor of three trading services (Momentum Alert, Insider Trader and True Value Alert). Alex is rated the #5 best investor according to Hulbert Financial Digest. I’ve also confirmed Martin Truax, vice president at Raymond James, whose “income & growth” portfolio has more than tripled during the past 10 years. He and his partner Ron Miller also have developed a highly successful trading system using “red” and “green” signals to determine when to get in and out of markets (they flashed “sell” in May and now are flashing “buy” — good calls!).

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Our keynote speaker will be Steve Moore, the chief economist for the Heritage Foundation and the #1 columnist for the Wall Street Journal, who will speak on “Money & Politics 2016: The Inside Story for Private Investors.”

The dates are March 16-19, 2016, at the five-star Atlantis Resort on Paradise Island, Nassau, The BahamasThis is during high “Spring Break” season, so I urge you to make your flight reservations now.

I soon will be announcing more top experts in portfolio management, tax and estate planning and foreign investing. But I want to encourage you to sign up now and take advantage of our special “early bird” discount — $200 off the retail price for Skousen CAFE subscribers if you register by Dec. 31. The price is only $495 per person/$795 per couple with the discount. And hotel rates at the five-star Atlantis Resort are only $209 per night. We are limiting this private meeting to 200 attendees only. To sign up, call Karen or Jennifer at 855-850-3733 ext 202, email info@freedomfest.com or go to gfs.freedomfest.com.

In case you missed it, I encourage you to read my e-letter column from last week about why consumer spending is not two-thirds of the economy. I also invite you to comment in the space provided below my commentary.

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BRYAN PERRY has been helping investors make money for more than 30+ years. He’s worked with some of the biggest names on Wall Street, including Bear Stearns, Paine Webber, and Lehman Brothers. He’s the editor of Cash Machine, Premium Income,

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