Money-Magnets.Net

Written by Adrian Jameson

Sunday, 08 June 2008 13:49

Richard Branson announced in September 2006 that he was pledging US$3bn to finding alternative energy sources (BBC news link ). Was this just a philanthropic gesture or something more? In my opinion not only was this a grand gesture but an opportunity for his companies to make many billions of dollars from alternative fuels in the future.

As oil prices spike there is still money to be made in oil but when this current bubble bursts the adjusted price will only be for the short term. The rise of the new economies in Asia (for example China and India) and their hunger for energy will cause a further upward trend in the value of oil. The supply of oil is decreasing and there have been few major finds in recent years but the demand is still increasing.

So what are the alternatives for the savvy investor? Early investing in companies that already have a good infrastructure and proven financial fundamentals such as companies involved in wind farms, solar power and tide power should give a long term return. Also look at companies developing or improving new forms of energy such as bio mass, hydrogen and methane.

One method would be to look at this changing picture for the long term, taking dividends and seeking company growth either through increased value or take-overs. This could be combined with a buy and hold strategy or with covered calls or just call options. Covered calls can limit your profits and your risk if used with put options.