This column was originally published on RealMoney on Feb. 20 at 7:57 p.m. EST. It's being republished as a bonus for TheStreet.com readers.
The topic down here in Costa Rica, where people are treating me a tad like a free-fire zone (I will master this celebrity stuff soon), is how long the infrastructure rally will last.
Yeah, we got a ton of portfolio managers here and most of them like the oil complex and the infrastructure plays. As usual, it makes me uncomfortable that so many people are into these stocks. But you wouldn't get to this hotel if you were in
-- even this year's Verizon -- so maybe that's OK. Plus, if they watch "Mad Money," they are into the theme, and they all watch the show.
But let's talk infrastructure. Cycles are tremendous moneymakers. The aerospace cycle, the disk-drive cycle, the remodeling cycle, they all have their own delicious durations. But there's nothing longer than an infrastructure cycle, unless you are talking about an infrastructure after 20 years of no new building because there's been no reason to build.
For the last two decades, OPEC has systematically stymied any new infrastructure from the oil/gas/chemical/plastic cycle by keeping energy just cheap enough to make it so you either couldn't get a return building petro stuff or you didn't need to build new because no matter how inefficient your plants were, you still did fine.
That's all over with now. Take a look at the plants that
gets orders for literally every week: They all depend on oil not going back to $40. Who knows how many FW will get if oil stays up here? Same with
. Same with
Maybe people just don't remember how big this engineering & construction group can become. I am blessed: Many moons ago, I went out with a fantastic E&C analyst who explained this world to me. She was laid off along with all the others in the cohort when the cycle wore off, courtesy of teens oil.
I am telling you, despite the fact that my pool companions lap this one up, we still don't even have this group ranking in the
, let alone have anything like the 4%-5% that it could go to.
My take: It's still early. Go buy FW. It is by far the cheapest, and I still think will double this year. I own it for
Action Alerts PLUS and I believe it will become my biggest position, not because of my buying it, but because of everyone else buying it.
How right is this Japanese market on the
-related pullback? Usual suspects please:
, the $13 kind.
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