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The Hidden Benefit of Beer Drinking

By Jeff Clark
Thursday, February 21, 2008

"I'll get that, Dad," my 8-year-old son, Grant, said to me as he reached for the check after lunch at our favorite Mexican restaurant.
 
I thought he was joking, so I went along with it for a while – fully expecting him to eventually ask me for my credit card. Instead, Grant reached into his pocket and pulled out a roll of $20 bills.
 
It's not every day you see an 8-year-old tossing down twenties like a Vegas dealer flips cards. Grant sensed my bewilderment and volunteered, "Grandma took me to the recycling center yesterday."
 
All those plastic garbage bags filled with empty aluminum cans, which have been taking up space in the garage over the past several months, turned into a $200 windfall for my second grader – and a free lunch for me.
 
I had no idea aluminum prices were going up. In fact, the last time I looked at a chart of aluminum was last summer – and prices were crashing. In the past month, however, the price of aluminum has spiked 20%. Take a look...
 
 
If the recent meteoric price rise is enough to stuff my son's pants pockets, can you imagine what it's doing for aluminum producing companies?
 
Many aluminum company stocks bottomed back in October 2006 and have been in a race higher ever since... That is, until this past summer, when metal prices fell off a cliff and the stocks found the lows of the year.
 
But even with the metal's recent rally, aluminum company stocks haven't done much. Oh sure, they're up a bit over the past few weeks. But while the metal itself is rapidly approaching the highs of last year, most aluminum company stocks are well below their highs.
 
And that's where we have our opportunity. If the price of aluminum continues to rally, then the stocks should play catch-up. Stocks like Alcoa (AA), Aluminum Corp of China (ACH), Superior Essex (SPSX), and Tredegar Corp (TG) will all do well.
 
On the other hand, if the price of aluminum doesn't hold up and the investments falter, you can drown your sorrows with a six-pack of your favorite beer.
 
Just remember to recycle the empties.
 
Best regards and good trading,
 
Jeff Clark




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Market Notes
Gold, silver, and oil stocks hit new highs... Agnico-Eagle, iShares Silver, Randgold Resources, and practically every oil & gas stock on the market.
 
Higher ag commodity prices hurt food makers... Dean Foods, Sara Lee, Seneca Foods, and Del Monte at new lows...
 
And boost fertilizer makers... Mosaic at a new high.
 
The bear market hits telecom... Verizon, Telephone & Data Systems, Telkom SA, and AT&T at new lows.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 38.31 +1.4% -0.6%
Gold 138.07 +2.1% +16.3%
Silver 28.60 +2.4% +53.6%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 18.01 -7.1% -19.8%
Gold Stocks 581.56 +3.0% +17.0%
10-Year Yield 3.02 +0.7% -10.7%

World ETFs
Symbol Price
Change
52-Wk
USA 122.89 +0.3% +11.3%
Canada 30.50 +0.2% +16.2%
Russia 21.94 +1.4% +18.1%
India 37.85 +0.3% +22.3%
Israel 16.69 +1.3% +10.8%
Japan 10.64 +0.6% +6.5%
Singapore 13.73 -1.1% +18.8%
Taiwan 14.78 +0.4% +19.2%
S. Korea 57.31 +1.3% +23.4%
S. Africa 71.87 +1.4% +28.2%
China 44.42 -1.4% -0.6%
Lat.America 53.17 +0.7% +8.4%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.59 +1.0% +18.9%
Big Pharma 64.14 +0.0% -3.2%
Internet 72.07 -0.1% +23.4%
Semis 16.22 +1.2% +29.4%
Utilities 31.28 +0.2% +1.5%
Defense 18.52 +0.1% +10.6%
Nanotech 10.03 +0.4% +1.6%
Alt. Energy 10.08 +1.3% -3.3%
Water 18.49 +1.0% +14.5%
Insurance 16.14 +0.4% +21.1%
Biotech 20.54 -0.2% +28.1%
Retail 19.70 +0.3% +30.2%
Software 24.79 +0.8% +25.9%
Big Tech 53.87 +0.3% +22.7%
Construction 13.10 +0.9% +15.7%
Media 13.64 +0.5% +26.0%
Consumer Svcs 67.39 +0.2% +24.5%
Financials 55.04 +0.3% +7.4%
Health Care 64.30 +0.1% +2.0%
Industrials 63.54 +0.5% +21.0%
Basic Mat 74.35 +1.1% +25.3%
Real Estate 55.32 +0.1% +25.0%
Transportation 91.77 +0.7% +26.9%
Telecom 22.59 +0.5% +17.8%