Stay Away from the New Dot-Com Stuff

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Stay Away from the New Dot-Com Stuff By Nick Hodge | Friday, January 13th, 2012 To me, free music is just that: free. I'm not sure how you make money giving stuff away. So when Pandora (NYSE: P) IPOed, I advised anyone who would listen to stay away. The market is still valuing the company at $1.93 billion, but it's down some 35% from its ballyhooed IPO price: The same goes for a service that lets people network online for no charge... I told people to stay away from LinkedIn (NASDAQ: LNKD) when it spread its wings as well. It's fallen from the nest more than 30% since August. And while some new dot-com plays like Groupon (NASDAQ: GRPN) and Zynga (NASDAQ: ZNGA) aren't totally free, I'm not sure how lucrative selling yoga classes at a discount or simulated Facebook farm games are... Neither is the market. Each is down more than 20% since November. While I employ and enjoy the services of all these companies (except Zynga), I don't pay a dime for them. So why would you as an investor? Advertisement This American Sector Will Lead the World Just three short years from now, the United States will reclaim something it lost years ago. This isn't just some title or bragging right — but perhaps the most important factor affecting modern economics and politics today... By mid-decade, the U.S. will once again be the world's top oil producer. It will create more new millionaires in the next couple years than we've seen in the last two decades... If you want to know exactly how it will be done, click here. Shot of the Hard Stuff The age-old wisdom is to invest in what you know. And, like I said, I don't know how to make money offering products for free. What I do know is that everyone eats. And I know most everyone uses oil in one form or another. I understand the basic fundamentals of those markets, namely supply and demand. On Wednesday, we talked a bit about oil supply and demand, why prices would head higher, and which companies you could invest in for profit. But you don't always have to invest in a company... The simplest way to invest in the things you know is to invest in the things themselves. Take oil, for example. I think it's headed higher, so I can either buy oil contracts or a fund that tracks the price, like ProShares Ultra DJ-AIG Crude (NYSE: UCO). Look how that's performed next to the Dow, Exxon (NYSE: XOM), and the free music company: You can buy a short ETF, like the ProShares Short Oil & Gas (NYSE: DDG), if you think prices are headed lower. Same goes for nearly any commodity out there. Advertisement Ever Wanted Endless Income? We all have. And a new system is proving to deliver. Every time it's "tripped," investors walk away with secure gains. See it in action right now.  I'm also big on agriculture. But I know during harvest time, prices are suppressed because supply is high. That said, you should start to short around September. If you did that with the DB Agriculture Short ETN (NYSE: ADZ), here's what your return would look like: The More They Stay the Same Many of the catalysts for these plays you know well. And they happen year in and year out without fail: the summer driving season; the winter heating season; the fall harvest. Some aren't seasonal, but are predictable nonetheless: gold up when the dollar's down; uranium's down on any negative nuclear news. You get the idea. No matter how crazy the market gets, how partisan the politics get, how hostile the Middle East gets, or how high unemployment goes... You can always trade the things you know. Physical assets should be a part of everyone's portfolio, and we'll be expanding on that topic in the next few weeks. Call it like you see it, Nick Hodge @nickchodge on Twitter Nick is an editor of Energy & Capital and the Investment Director of the thousands-strong stock advisory, Alternative Energy Speculator. Co-author of the best-selling book Investing in Renewable Energy: Making Money on Green Chip Stocks, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.   Related Articles Investors Can Find It All in the Bakken Bullets for Christmas American Shale Deposits Garner International Interest U.S. New Top Natural Gas Destination From the Archives... EDF Energy Cuts Gas by 5% 2012-01-11 - Brianna Panzica OPEC Isn't Cutting It 2012-01-11 - Nick Hodge Now Cranking Out 510,000 Barrels a Day 2012-01-10 - Nathan Holl Alaska's Last Chance at Redemption 2012-01-10 - Keith Kohl Did Fracturing Really Cause 11 Earthquakes in Ohio? 2012-01-09 - Jeff Siegel

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