Updated from 1:10 p.m. EDT
I decided to indulge in some food inflation, so yesterday I went to Arturo's Pizza on Houston Street in New York City and ordered a $160 large pie pizza.
I'm a believer in pizza diversification. I can't ever decide on a topping. Do I want onions and bacon? Or green peppers and pepperoni? Or lobster and broccoli? There are too many permutations, and if you make the wrong decision, there's no turning back, and serious loss is the only possible outcome -- like with a portfolio.
So I ordered all 34 toppings on the menu. At $4 a topping (except for the lobster, which was $15), that seems like some serious food inflation. (I vaguely remember back in the good old days when a topping was no more than $2 per.) Unfortunately, Arturo's couldn't satisfy me. "We tried," the waitress told me, "but the pizza won't be able to cook with all those toppings on it."
So we negotiated, and we settled on about 28 of the toppings. "I don't know how your stomach is going to handle it," she said when she served the tour de force. "It's too much meat." But hey, doesn't the fish balance out the red meat? And don't the vegetables count for something? Can't I argue that this is simply a balanced meal?
But wait. Should I even be talking about food inflation? That's so first-week-of-June 2008. I can't keep track of the "important concepts" of the day. Last month the hot topic was "Are we at war with Iran?" Then it was "Is oil going to $1000?" Then it was "Is the entire banking system going to collapse?"
Last week, the hot topic was wind power. My good friend (at least on Facebook) T. Boone Pickens was on
The Wall Street Journal
New York Times
trashing our dependence on foreign oil and touting the benefits of wind power. He might be right, but it's hard to say. I don't think I ever even heard investors talking about wind power until about three months ago. Suddenly, all of these hot wind power stocks that make no money started shooting up.
My general approach when dealing with "hot topic of the day" type of stocks is to look for back doors. Find stocks that have legitimate cash-generating businesses trading at cheap multiples that happen to be making serious moves in whatever the hot field is.
Here are my two favorite stocks that are back doors on wind power:
A note from James Altucher:Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to atheme but also offer significant analysis as to why the stocks are cheap.Here are some examples: Here's the challenge: Build a portfolio at Stockpickr.com with greatanalysis, and send me the link. Each great portfolio (with analysis)will get posted on TheStreet.com with your byline (as a "StockpickrGuest Columnist") and will be included in my email I send to Jim and the otherhedge fund managers on my list.
- Stocksrelated to drilling the Marcellus Shale
- MLPSwith yields above 7%
- Microcapstrading for less than tangible book
- Stocksthat do well after Hurricanes
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of
LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for the
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
TheStreet.com has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from TheStreet.com.