Yesterday was Earth Day, so to celebrate I went out and burned a tire.
Then I used up a can of Aqua Net to make my Siberian Husky look like Elvis, and finished up with a call to ChemLawn...
My acreage will soon be a glowing green lawn of happiness. My kids will love it.
I hate Earth Day for the same reason I hate helmet laws.
The other day I was drinking coffee at one of those outdoor cafes in Annapolis. I read aloud a headline from the paper: “Michigan Ends Helmet Laws.”
A beautiful brunette looked up from her hazelnut mocha and asked, “Why?”
“Because screw them — that's why.”
Give Me Liberty
Perhaps I'm getting cynical in my dotage, but I'm starting to see everything in terms of power.
A seatbelt law isn't something designed to protect “the people”; it's a law that grants the state yet another opportunity to write you a ticket. You just gave the scum in the State House more power — to the tune of $75.
Baltimore great H.L. Menchen once wrote, “The whole aim of practical politics is to keep the populace alarmed — and hence clamorous to be led to safety — by menacing it with an endless series of hobgoblins, all of them imaginary.”
Fireworks, missing kids, gays, terrorists, Earth Day... they're all the same.
It may happen that Muslim lesbians will steal your child and shoot out his eye using a bottle rocket, but it's not very likely. Nor is it likely that offshore wind farms will survive 20 years of hurricanes blowing up the Eastern seaboard...
But we'll all pay for them, one speed camera at a time.
The best thing to happen to government is partisan bickering and gridlock, which prevent the passing of more laws. This is a function — not a bug.
A hoary old hedge fund manager once told me never to invest in something the government subsidizes.
The best investment is one that works because it makes sense.
If there is a better, faster, cheaper way, the market will find it (and then create an industry lobby to raise barrier to entry regulations).
Back in 2010, I jumped aboard the plan put forward by T. Boone Pickens called the Pickens Plan, which called for the government to pay companies to convert commercial trucks to natural gas from diesel. The Pickens Plan would also subsidize the building on fueling stations across the United States.
The money went instead to failed solar companies, and the Pickens bill is still working its way through Congress...
But the natural gas market doesn't need government subsidizes.
Nat gas is below $2 per mmBtu. A long-haul trucker can save anywhere from $30,000 to $49,000 a year by switching to natural gas. It costs about $15,000 for the switch, so it will easily pay for itself.
Natural gas is cleaner, quieter, and the engines last longer. And it's proven technology. There are some 13 million natural gas vehicles on the road around the world.
Pickens' company, Clean Energy Fuels Corp. (CLNE), has 273 fueling stations and is spending $450 million to build a network of LNG stations on major trucking corridors across the country.
Waste Management (WM) will only buy natural gas trucks. FedEx (FDX) will have its first long-haul nat gas truck on the highways this summer.
It is obvious that natural gas will supply the fuel in commercial trucks in the near future...
But what you might not know is that the shipping fleet is old.
There are 2.2 million semi-trailer trucks in the U.S. with an average age of seven years.
The fleet is the oldest it's been since the Carter administration. These trucks generally last 10 years, so average age historically runs at five years.
The great recession coupled with new EPA standards stifled replacement in 2011. No one wanted to buy the first model year and demand was slack.
That said, there will be 150,000 trucks manufactured this year — but 220,000 would be needed just to keep the average age at seven years.
This means 2012 should be big for truck sales.
Trucking company Swift Transportation Co. (SWFT) just reported revenue growth of 9% for the quarter. Not bad...
But what got me excited was that SWFT raised guidance for the rest of the year to between $13 million and $14 million in total for the full year 2012. This is about 60% higher than the 2011 levels of $8.5 million.
Insiders are buying, the company has a P/E of 8.58, and it trades at less than five times cash flow. Barring injury, this stock will go from $10 to $15 by next April.
The natural gas trucking trend is one that will play out over the next five years.
It is a space you want to be invested in.
There are a number of ways to play it beyond over-priced Clean Energy Corp... namely small companies you've never heard of that make infrastructure, filter water for well sites, and manufacture nat gas engines.