We've got an oil shortage. A corn shortage. An honest-politician shortage.

Now you can add a shortage of small-cap growth stocks with potential strangleholds on fast-growing niches. Yep, this year I've had a hard struggle to find enough stocks like that to fill out my annual revision to my Future Fantastic 50.

That's disappointing, because for the fourth year in row, that portfolio beat both the Nasdaq Composite and the S&P 500. Since last July, the Future 50 is up 31%, whereas the S&P and Nasdaq have gained 26% and 25%, respectively.

This portfolio is volatile, and these stocks are best suited for aggressive investors. Even then, they should be owned as the edge surrounding a more conservative growth core. By casting my net even farther overseas this year, I've been able to keep to my goal of replacing 20% of the stocks in this portfolio in my annual revision.

The 10 stocks I'm adding to the Future 50 portfolio this year are:

  • Alvarion (ALVR)
  • Itron (ITRI)
  • DaVita (DVA)
  • Devon Energy (DVN)
  • Embraer (ERJ)
  • First Solar (FSLR)
  • Gamesa Tecnologica (GCTAF)
  • Oshkosh Truck (OSK)
  • Plum Creek Timber (PCL)
  • Suntech Power Holdings (STP)

I'm also deleting 10 stocks from the portfolio. Two of those, VNU and Color Kinetics ( CLRK), are dropping off because they've been or are being acquired. Of the other eight I'm deleting, these four will be added to my 50 Best Stocks in the World portfolio when I revise that list in September: Accor ( ACRFF), EMC ( EMC), Nvidia ( NVDA) and VeriSign ( VRSN).

I'm dropping a final four from the Future 50 list because, in my estimation, they haven't lived up to their promise and no longer have the future potential I require from stocks on this list. They are BEA Systems ( BEAS), Evergeen Solar ( ESLR), JDSU ( JDSU) and Openwave Systems ( OPWV).

Remember, a stock has to jump a pretty high hurdle to make it onto this list. I began the Future 50 list in July 1999 with the goal of identifying 50 stocks that passed a simple test: If you were to look at the list five years down the road, you'd say about each entry, "Boy, I wish I'd bought that five years ago."

If I did a perfect job of picking stocks, each member of the portfolio would have a history of beating the market averages in the past five years and the potential to do it again for the next five. To beat the market, I'm willing to take on a fair measure of short-term volatility. These stocks will give an investor a faster ride up and down than the stocks in my passively managed portfolio, the 50 Best Stocks in the World.

Frankly, there aren't a whole lot of candidates to pick from. I think we're at a cyclical low in the creation of new public growth companies, for four reasons.

First, the private-equity, acquisition and buyout booms are all taking young growth companies out of the public market. That's what happened to Color Kinetics this year. Next, a relatively small number of companies have gone public in the past 12 months from historically high-growth sectors such as technology.

Then there's the fact that many of the most interesting overseas growth stocks still aren't public or, if they are, aren't easily purchased by U.S. investors because they trade only overseas. Finally, Chinese growth companies, which have been going public in droves in the past few years, remain difficult to evaluate.

So to discover this year's crop of potential growth rockets, I've had to dig harder and travel farther afield.

Of the current Future 50, I've given buy ratings to seven: Alvarion, Canadian Natural Resources ( CNQ), DaVita, Embraer, Maxwell Technologies ( MXWL), SiRF Technology ( SIRF) and Tejon Ranch ( TRC). That means I believe current prices on these stocks mark an especially good entry point.

Membership in the list as a whole will be updated in July 2008.

Switching gears, I want to revisit a past column. In May I wrote: "China's government wanted to slow the economy's growth a bit from the 10.7% rate turned in for 2006. A rate near 8% would be ideal, Beijing's planners said at the beginning of 2007, because that is high enough to generate the jobs the country needs to stay even with its population growth and low enough to keep the economy from further overheating.

"Instead, what they got was 11.1% growth in the first quarter, the National Bureau of Statistics announced April 19. And now the Chinese Academy of Social Sciences is predicting 10.9% growth for all of 2007."

Now even that growth rate looks low. On July 19, China announced that growth for the second quarter of 2007 had actually accelerated to an annual rate of 11.9%. Growth for the first half reached an annual pace of 11.5%.

And the signs of overheating continue to flash, "Warning: Danger ahead." China's consumer inflation grew at a 4.4% annual rate in June. Food was the big culprit, with the prices of eggs and pork jumping 20% from last year's prices. In response, the People's Bank of China, the country's central bank, ordered another interest rate increase.

The 0.27-percentage-point increase on one-year bank deposit interest rates and on commercial lending took the interest rate paid on bank deposits to 3.33%. The one-year lending rate climbed to 6.84%. Nobody expects this latest rate increase to have much effect on the runaway train that China's economy has become.

At 3.33%, bank depositors are still losing ground to inflation, and at 6.84%, the real cost of a commercial loan is just 2.44%. The faster the train goes, unfortunately, the more likelihood that it will jump the tracks when the brakes are finally put on hard.

At the time of publication, Jubak owned or controlled shares of the following equities mentioned in this column: Devon Energy, Gamesa Tecnologica, Maxwell Technologies, SiRF Technology and Tejon Ranch. He did not own short positions in any stock mentioned in this column.

Jim Jubak is senior markets editor for MSN Money. He is a former senior financial editor at Worth magazine and editor of Venture magazine. Jubak was a Bagehot Business Journalism Fellow at Columbia University and has written two books: "The Worth Guide to Electronic Investing" and "In the Image of the Brain: Breaking the Barrier Between the Human Mind and Intelligent Machines." As an investor, he says he believes the conventional wisdom is always wrong -- but that he will nonetheless go with the herd if he believes there's a profit to be made. He lives in New York. While Jubak cannot provide personalized investment advice or recommendations, he appreciates your feedback; click here to send him an email.

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