Fund managers thoughts on the sector
July 31, 2000: Finishing Up. I finished buying FCEL for Millennium today. We now own 20,000 shares. This isn't a large position, but that's less important than the sector ownership. In a newly-emerging sector like this, you have to own a little of everything, or at least several of the leading companies in each of several technologies and different kinds of power focus. PLUG is fixed residential and business, for instance. So is FCEL. CPST makes the turbines that companies like CPN and NRG use in their new, small-scale power generation facilities. BLDP focuses on the transportation market. PowerOne (PWER.O) designs power conditioners and supplies to smooth out the flow of electricity to sensitive equipment like routers, ISPs and data storage farms.
My objective is to build a significant exposure to the new, unregulated energy sectors of Independent Power Producers (IPPs), new alternative energy technologies like Fuel Cells (FCs), and the major, pure-play suppliers, like CPST. We already have exposure approaching the upper single digits as a percentage of the Fund in this interrelated group of new companies and technologies. The market is potentially enormous when you consider the North American power generation industry, and the transportation industry. CPN alone, for instance, is up 30 times over our very first purchase of the company, and it's a utility, for heaven's sake! This new power revolution is for real. The old monopoly utilities are basically out of the game as far as most of the needs of the new digital economy go. In fact, this will be increasingly true as the manufacturing sectors of the economy increase their dependence on new digital technologies that are hypersensitive to voltage fluctuations, nevermind power outages. We will continue to build positions in these companies as we learn more, and as opportunities present themselves.
ipsfunds.com
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I bought IDA, an utility that has sold 3.5M to Bonneville Power for the new reformer.
Jack |
