Experienced management focused on increasing market share through strategic acquisitions. Provides a more diversified range of services unlike its competitors, i.e., ACM not only builds airports, tunnels (think NYC subway), water treatment facilities, bridges, skyscrapers, etc., but also provides project design and management services. Well-balanced portfolio consisting of lucrative foreign and domestic infrastructure projects, including contracts with the U.S. military (Bagram Air Base in Afghanistan). These guys have brains and guts. ACM has a healthy backlog of contracts, too, which ensures a consistent stream of revenue for years to come. Those who are bearish view a large backlog as a potential liability in that if the company can't finish its projects on time, it will fail in its attempts to obtain future contracts. What the bears don't take into consideration is that by the same token some projects will be cancelled, perhaps due to lack of lack of funding by a governmental agency for political reasons. In such an event, the company can just move on to the next project on its list and not have its equipment and workers sit and wait for the next contract to come along. Payments on equipment have to be made regardless of whether the equipment is being put to use or not. The same is true with regard to salaries. The folks who work for ACM are extremely talented people who do not get paid by the hour. ACM also considered by others to be a "green" company, and the company itself takes pride in its environmentally friendly designs. Acquisition of Cansult Mansell provides ACM with excellent exposure to booming infrastructure demands in Middle East by allowing it to represent itself as a Canadian rather than U.S. company. I will elaborate as to why I believe this gives ACM a significant competitive advantage upon request. I expect exponential revenue growth in the near future. Barring any catastrophic events such as a major war in the Middle East or financial chicanery the likes of ENRON, ACM has the potential to become a colossus in theglobal infrastructure industry.

APD is more than just a global player in the chemical industry. It also designs the processes and builds the complex mechanical systems used to produce whatever chemical compounds a client requires. APD snythesizes and sells gases used for a multitude of purposes including, but not limited to, health care, petroleum refining and manufacturing computer chips, making it less likely to experience a decline in revenues due to a slowdown in any one particular sector. APD is also one one the largest producers of hydrogen in the world, which is already being used as a fuel source for automobiles in New York. What many don't know is that a reasearcher in California recently invented a more practical hydrogen fuel cell. Whereas fuel cells used to operate at extremely high temperatures, the new fuel cell operates at drastically lower temperatures. If this new fuel cell can be perfected and manufactured in a cost-effective way, this will open the door to a new age in energy production. APD recognizes this potential and is making efforts to ensure that the company remains at the forefront of this exciting and immensely profitable industry. Addendum 09-24-07: APD announces $1B common stock repurchase plan and .38 per share dividend payable 11-12-07 to shareholders of record as of 10-01-07. Addendum 05-19-08: APD recently announced dividend increase to .44 per share. APD is providing liquid hydrogen as fuel for fleets of taxis in NYC and for buses in London. When you think about it, this idea is brilliant and well executed: While hydrogen may not be practical for individual use, for fleets of vehicles that refuel at a central location and consume large amounts of fuel, but do not travel long distances, i.e., within a fixed radius from the fueling facility, it makes perfect sense. It is an environmentally friendly fuel and will prove to provide greater cost savings for the companies that use it.

In its annual list of the 500 best companies in America, Fortune Magazine rates FCX as #18 in terms of return on revenues and #14 in terms of return in shreholders' equity for 2006. It also rates FCX as #17 in terms growth over the last five years. Recently FCX acquired Phelps Dodge, also ranked #20 by Fortune in terms of return on revenues. Assuming that the integration process can be accomplished without any major difficulty, I expect the resulting efficiencies will make FCX even more profitable. And with less than 400 million shares outstanding, as the demand for FCX stock increases, it stands to reason that its price per share will increase dramatically. But here's what's really interesting: Although it is comon knowledge that FCX produces gold and copper, both of which are in great demand as a result of the global infrastructure boom, FCX now has a significant competitive edge over its competition. Its acquisition of Phelps Dodge provided FCX with control over the highest-producing molybdenum mine in the world, of which there are only a few. Molybdenum is a rare element that when added to steel (together with chromium) produces a stronger, more heat resistant steel that is more desirable for building skyscrapers. For example, had the WTC Towers been made with this enhanced steel, it is believed that they would not have collapsed as quickly and more people would have survived. I believe that future structures on the scale of the WTC will be required to be made of this enhanced steel. With the new steel futures market opening in Dubai, I believe that steel will be able to be traded more efficiently and more competitively, resulting in bigger margins for steel producers. Bigger margins for the steel producers will offset the costs of adding moylbdenum and chromium to the steel they produce. Consequently, greater demand for the above-referenced rare minerals will increase and FCX will experience ARG. So I'm not worried about the day-to-day fluxuations in the price of copper or whether the Indonesian government's demand for greater royalties on FCX's gold production will negatively impact FCX's overall value or profitability because I believe that FCX has an ace up its sleeve and the savvy to know how to play it. ADDENDUM 10-04-07: This morning TheStreetTV.com aired a special segment about molybdenum, its uses, the companies that produce it, cureent and projected demand/pricing. They confirmed that FCX is the world's largest producer of this rare element, that demand is expected to grow through 2012, and that the price of the material will increase as demand increases, leading to greater revenues for FCX. ADDENDUM 10-08-07: IBD reports that the integration of FCX and Phelps Dodge has gone smoother than anticipated, resulting in greater efficiencies and cost savings. FCX's sale of its cable manufacturing business has also provided additional revenue which FCX is using to pay down the debt incurred by the Phelps Dodge acquisition. At the present rate, the Phelps Dodge debt will be completely paid within the next 18 months -- absolutely incredible -- and the resulting returns to shareholders will be significant. Addendum 05-19-08: The announcement that FCX would spend $60+ million dollars to restart the Climax moylbdenum mine in Nevada whent largely unnoticed. FCX must (a) anticipate a greater demand for this mineral in the future and (b) this will secure FCX's place as the greatest producer of moylbdenum in the world, resulting in FCX having a de facto monopoly on moylbdenum.

When I first read an article in the NYT about the oil sands recovery project in Canada, I thought it might be a good investment. Then I thought, no, too speculative. The article went on to describe the methods used to extract the oil from the sand and, voila! It hit me -- they used the giant loaders and other heavy equipment made by CAT! I was intrigued. Further investigation revealed that CAT products were in great demand around the world -- Mining in Peru, infrastructure in China (where CAT is also building a manufacturing facility in partnership with a Chinese company). Even on holiday in Antigua, everywhere I looked I saw CAT equipment. Financially, CAT was growing revenues, paying down its debt, paying a generous dividend on a regular basis, and had a healthy backlog of orders. Although everyone knew that CAT was experiencing a slowdown in sales in the U.S. because of a slump in housing, that was not considered to be devastating, but rather a short-term problem that was now offset by ROW sales. Besides, when U.S. homebuilding sales rebounded (as everyone soon expected), that would just make CAT all the more profitable. Then came the 2nd quarter conference call where mfg. restructuring problems and a decline in truck engine sales were discussed, even though earnings remained robust. On top of that came the sub prime commercial paper devaluation. During the ensuing panic, CAT's stock price took a hit. All of a sudden, the 80-to-100-to-120 hypothesis seemed like a pipe dream (maybe even a crack pipe dream or, as my friend and colleague Mr. Holmes would say, an opium pipe dream). Adding insult to injury, a prominent financial magazine cast a rather unflattering light on this great American company, citing everything from low employee morale and longstanding labor disputes to manufacutring and delivery problems. Finally, even our esteemed Herr Cramer flagellated himself on CNBC for his enthusiasm for CAT. So why am I defending CAT? I'll tell you why: First, I listened not only to what CAT management had to say, but how they said it. They did not dodge the tough questions; they were candid about the problems they faced and had substantive responses as to how they would address those problems. Second, after hearing their voices and seeing their photos in the aforementioned attempt at journalsim, I was able to determine the character of the men who run this behemoth of a company. These are not guys who wear Armani suits and drive to fancy office buildings in Manhattan in their BMWs after a weekend in the Hamptons like the whiny analysts who led the inquisition during the conference call because CAT missed its earnings estimates by a few cents during a three-month period. The men who run CAT are real men who live and work in the real world. They are cut from the same bolt of cloth as the men who, against all odds, made this country great. They know every aspect of how to design, manufacture and operate heavy equipment. They look and act and dress like the workers they employ. They are men who earn the respect of those with whom they do business. They are honest and hardworking. How do I know this, you ask? Because I have lived among such men all my life. Men who aren't afraid to get their hands dirty. Men who dig in their heels to solve problems, not blame others like the crybabies who have the audacity to judge them. But I digress. Manufacturing heavy equipment of such enormous proportions in a timely manner while at the same time maintaining the highest standards of quality is a truly daunting task. The fact that it can be done at all is a minor miracle. I have seen similar equipment first hand in the coal mining region of northeastern PA. Euclid trucks with tires taller than an NBA player and frames so strong they can carry a load as big as a house. Bucycrus-Erie "Steamshovels" so massive that they look and sound like something out of Jurassic Park. Simply put, CAT doesn't make Tinker-Toys or toilet paper -- they make mega-machines. As such, problems regarding manufacture and delivery are to be expected. And despite what the pundits say, the men who purchase such equipment know that this is a fact of life in their industry, plan accordingly, and move on knowing that no company will ever be perfect. I would even go so far as to say that purchasers of CAT equipment are willing to wait beacuse CAT equipment is of such high quality that it saves them hundreds of millions of dollars in repair costs. Remember: When the equipment goes down, production goes down, and so do revenues and...well, you understand what I'm saying. Have faith in CAT and sit tight. These are not like the man behind the curtain in the Wizard of Oz. The men behind CAT are the real Amercian deal who will come through despite what their critics have to say. And, yes, Virginia, the U.S housing market will recover. Addendum 08-26-07: IBD reported last week that the damand for raw materials such as copper, coal and other minerals continues to increase, despite the recent slowdown in the U.S. economy. It is axiomatic that as the demand for X increases, so does the price of X. Now prices are at a level that mining projects that were previously considered too costly to pursue now look attractive (profitable) to companies such as BHP and FCX. What effect does this have on CAT? Simply put, it means that the mining companies are attempting to extract minerals in locations that are harder to reach and will therefore require more of the heavy equipment that CAT manufactures in order to excavate and transport said minerals. Addendum 08-27-08: Congress approves additional subsidies for U.S. farmers. The subsidies will, inter alia, allow farmers to purchase additional equipment, some of which is made by CAT. An increase CAT's domestic revenues could result in it meeting or beating the analysts' expectations for the third quarter, at which time I expect the analysts to upgrade CAT's rating and then, well . . . you know the rest. This CAT has nine lives. ADDENDUM 11-07: Don't give up on CAT. When its Chinese manufacturing facility begins full production next year, sales in China and the rest of Asia will soar, accounting for over 10% of CAT's revenue -- a significant increase. Should the U.S. housing market recover, you will feeel like a fool for having sold CAT now.

Just added to S&P 500. Article in last week's IBD (10-05-07) reported that TEX is profiting from mining companies that are attempting to excavate ores from locations that were previously too costly to mine. With the price of raw materials increasing due to ROW demand, the excavating equipment and drilling platforms manufactured by TEX have now become more affordable. ADDENDUM 11-07: I am confident that in the spring of 2008, Congress will approve a whole boatload of infrastructure spending, from which TEX will profit, as it manufactures heavy machinery used to build roads. TEX also manufactures specialty military vehicles which are reliable, tough, fast & maneuverable and that can be outfitted with a variety of weaponry, such as rocket launchers. Such vehicles will be more useful in future urban conflicts and less costly, so the military can afford to buy more.

This is a complicated issue. I believe that the share price of NYX is down not due to any action on the part of malicious "unindicted co-conspirators" or because it is "hated" on the street. (Remember: Herr Cramer says emotion is not part of the equation). The pros know the real story: Securities exchanges are in a state of transition. In the future they will depend less on listing fees, membership fees, and transaction/clearing fees as the marginal cost of executing a trade approaches zero thanks to computerized trading. Securities exchanges of the future will look more like media companies, as they will derive their primary revenue from providing information and real-time quotes. The aforementioned transition will also be accompanied by further consolidation within the industry. Instead of the many exchanges that presently exist, in the future there will be only a few, possibly 3 or 4, global exchanges. This theory is supported by this summer's conference in NYC that was attended by representatives from every major exchange in the world. NYX is "assisting" the Japanese improve their trading platform by supplying them with IT experts. One could reasonably conclude that this "tech support" will result in NYX and the Tokyo exchanges using identical trading platforms, ultimately resulting in a merger between the two. NYX has also recently opened an office in China. It is not beyond the realm of possibility that NYX could also establish some sort of mutually beneficial relationship with the Hong Kong exchange. NYX is also rumored to be seeking to acquire a derivatives exchange. I am confident that at the end of the day NYX will emerge as one of the aforementioned global exchanges. In the meantime the U.S. government must promulgate new regulations to ensure an even playing field even though it presently doesn't know what the playing field will look like or how pricing will be determined. Instead, it will take its cue from the exchanges themselves, hence the aforementioned NYC conference. There are also international political issues involved that must be addressed before the era of the 21st century securities exchange can be ushered in. In short, an investment in NYX must be considered long term if one hopes to derive any benefit from it. For a more complete discussion, read the following document: http://fic.wharton.upenn.edu/fic/papers/02/0214.pdf Addendum 05-19-08: Consolidation within the industry continues, and NYX acquired the American Stock Exchange. ECO Duncan Neidermaier is doing a great job cutting costs ($70 million instead of $50 million). As expected, NYX has formed a joint venture with the Tokyo Stock Exchange. If you listened to the conference call carefully, between the lines and beyond the jargon, you cannot help but conclude that NYX is evolving into an information services provider. It will be from providing information -- whether it be from creating a new, more accurate alternative standard to replace LIBOR or from providing valuation services -- from which NYX will generate most, if not all, of its future revenue. It does not appear that the other exchanges have adopted this evolutionary idea, as they waste a great deal of time and effort trying to steal each other's listings, but sooner or later they will realize that what the chaps at Wharton predicted is, indeed, where the future of the exchanges is headed. By that time NYX will be so far ahead of the competition that they will be the dominant player in the industry. Who can predict what will happen then? I am confident that whatever the outcome, NYX will profit considerably. Addendum 03-13-09: NYSE Euronext (NYX) and Eurasia Group, a leading global research and consulting firm on political risk, today announced an agreement to offer global political risk assessments, analytical information and publications to New York Stock Exchange (NYSE)-listed companies. Eurasia Group’s team of analysts lead by Ian Bremmer, Eurasia Group’s president, will host regular, interactive webcasts, via the Digital Exchange, the NYSE’s webcast series. Exclusive to NYSE-listed issuers, these forums will evaluate global political drivers, analyze worldwide trends, and highlight risk trigger points, which are critical to senior executives leading domestic and international businesses. In addition, Eurasia Group will publish reports exploring the countries and topics covered during each forum. “As the global financial crisis prompts governments to be increasingly involved in economic decision making, corporate leaders need to fully understand the impact of politics and policies on markets and business operations in particular countries or regions,” said Joseph Mecane, EVP and Chief Administrative Officer, U.S. Markets for NYSE Euronext. “Eurasia Group’s political analysis —when incorporated into a firm’s overall risk management strategy—enables corporate leaders to develop strategies with increased confidence. Also, the Eurasia Group partnership further underscores our commitment to provide world-class, value-added services to our listed companies.” "Listed issuers are increasingly aware of and affected by political decisions,” said Ian Bremmer, president of Eurasia Group. "We provide our clients with in-depth analysis of major policy issues, educated forecasts, and unique insights from our global network. In addition to macroeconomic policy, there is consistently strong demand for our services as it relates to emerging markets, energy, regulatory, and country-specific coverage.” To commemorate the new NYSE Euronext–Eurasia Group partnership, Eurasia Group President Ian Bremmer will ring the NYSE opening bell on March 18, 2009 while highlighting his new book: “The Fat Tail: The Power of Political Knowledge for Strategic Investing,” which is co-authored with Preston Keat, Eurasia Group’s director of research. About Eurasia Group Eurasia Group is the world's leading global political risk research and consulting firm. Since 1998, it has helped clients make informed business decisions in countries where understanding the political landscape is critical. The firm’s research analysts are trained social scientists with post-graduate degrees, extensive professional experience, and a diverse range of language capabilities. Headquartered in New York, it also has offices in Washington and London, as well as a network of experts around the world. For more information, please visit www.eurasiagroup.net.

Solexa and 454 Life Sciences are the leaders in chromosome mapping technology. 454 Life Sciences was acquired by Roche in early 2007, and Solexa was acquired by Illumina in late 2006. Listen to the most recent ILMN conference call. It is downright cordial when compared to most analyst inquisitions. ILMN is the best company no one's ever heard of, but I expect it to become a household word in the next few years as genetics takes centre stage in the biotech industry. Incredible growth. Sells both analytic equipment (high price, low volume) and the consumables (chips) that go with them (low price, high volume). ILMN is in the "sweet spot." If you look at its balance sheet, ILMN isn't making any money, but that hasn't stopped GS from doubling its interest in ILMN since June. The greybeards at GS know that ILMN has enormous upside potential and are waiting patiently. Also, over the past three months, the shorts as a percentage of the float has decreased substantially. Presently, ILMN's customers consist of research institutions and biotech companies. As the age of the $1,000 genome approaches, I expect to find ILMN products in every hospital in the country. Also, specialty "clinics" will proliferate as people will want to have their genome mapped to find out whether they are succeptable to certain diseases, but at the same time these people will want to keep the results confidential least they be denied health insurance depending on the results. The results of tests done at hospitals will become part of each person's medical file, but the results obtained from the "clinics" will remain confidential. This is yet another play we can someday make from ILMN's success. ADDENDUM 11-28-07: Today Herr Cramer recommended medical diagnostics as safe, long-term stocks to own, and in particular Genprobe (which uses DNA and RNA testing methods). All of the medical diagnostic companies rely on ILMN to provide them with the bead chips needed to analyze DNA and RNA. The diagnostics company that I would recommend is Roche (OTC:RHHBY), as it has acquired many other smaller diagnostics companies, (and the tons of intellectual property that goes with them), owns >50% of Genentec, AND has its own great pharma pipeline. Addendum 05-22-08: When asked his opinion of ILMN this week on "Mad Money," Herr Cramer said: "Illumina is the arms dealer to the biotech industry. I like this one." Also, El Presidente G.W. Bush signed a bill into law this week which would prevent health insurers and others from discriminating against people on the basis of their genetic profile. I find the LACK of fanfare accompanying this important new law to be very peculiar. On the whole, however, this legislation adds further credence to my theory that we are moving away from the era of "Big Pharma" and into the era of "New Pharma," which will generate revenue according to a new bubsiness model, i.e., by developing genotype/biomarker-driven drugs in smaller disease markets; by using molecular diagnostic technologies to resuscitate off-patent, lower-efficacy drugs in smaller, targeted populations; and by establishing healthcare networks to forge relationships with patients from predisposition testing to disease treatment.

SSYS designs and manufactures rapid 3D prototyping systems. They sell the machines and the consumables that go with them (think laser printers and toner cartridges). Formerly only large companies like automobile makers could afford such devices. Now they are affordable enough for small businesses (best example is a motorcycle shop in the midwest that can't afford machine tools). Soon as the cost of these devices reaches $1,000, you will find them in every home in the USA, just like laser printers of today. Who wouldn't want a machine that could produce everything from a computer keyboard key to a Barbie doll head with your child's face on it? SSYS is the leader in its industry and has a 50% market share. Addendum 05-22-08: SSYS has an exclusive North American distribution agreement with a Norwegian firm that has developed technology similar to SSYS, only instead of polymers the Norwegian 3-D replication systems use titanium. Also, it was announced this week that U.S. researchers have found a way to use titanium more efficiently, thereby lowering production costs and making the use of titanium more attractive for certain products.