Customer Reviews

Power Hungry: Strategic Investing in Telecommunications, Utilities and Other Essential Services

5 star:		(5)
4 star:		(1)
3 star:		(1)
2 star:		(0)
1 star:		(0)

 

 

A good, well written update on the power industry. Conrad is balanced, shows no bias but is obviously concerned about the future power situation. 20 years of underinvestment, in his opinion, will start taking their toll and it is up to us to rethink this and take a long, hard look at the changes taking place in the industry.

Good for the investor and a must read for the Analyst (if there are any left) on Wall Street.

Conrad is one of the top independent analysts of the essential services industry--utilities, pipelines, telecom, etc. Here he steps back to give readers the historical context of deregulation in the power industry, how it came about, what it's implications are, and how to benefit from it.

Part investment book, part history book, part current events book, it does a great job integrating all these varied aspects into an interesting, edifying read. For anyone interested in what's going on with the most necessary services within our economy this book satifies on numerous levels.

I have to take issue with the review that says the book is "Bad for Investment Advice." Power Hungry is a decent introduction to utilities, which the author broadens to include all "essential services" like water and telecom. A lot of the info is dated since this was written several years ago. But if you want to know how to invest in utilities for both income and capital gains, it's a great primer.

I've been an investor since 2000 - yes, I started just before the dot-com crash. It took me a couple of years to make back losses, and I never would have made any money if I didn't discover that SAFE stocks like utilities are the only way to make and hold on to profits. The reason I'm coming back to look at Conrad's book after first reading it 5-6 years ago is because utilities are out-performing everything else right now. I just read the investment newsletter reviews from MarketWatch, and they're rating Conrad's newsletter about utility stocks as the second highest in returns out of a couple hundred (I think) newsletters. I'm not a subscriber, and I don't usually write Amazon reviews, but it annoyed me that the first review that shows for this book is WAY off base in saying you shouldn't read it for investment advice. It's the FIRST one you should read for investment advice - if you want to actually make money!! There are thousands of fancy investing books, and lots that are better written, but in the end it's all about making money, right? 'Nuff said.

Essential reading for anyone interested in how to take advantage of the changing forces shaping the energy and telecom utility industries. Well-written & interesting. I'm a subscriber to Conrad's excellent newsletter, which I also recommend.

Those of you looking to invest in the energy, (electric) utility or other critical service areas would do well to heed this advice: all of these industries deal in commodities, and all of them require participation in financial markets (large capital spending requirements and active involvent with derivatives to manage delivery of the commodity at various points in time), so it behooves you to look very closely at the management and the debt levels of these outfits. Read this book to obtain a good, general business perspective, and more important, a historical perspective of these industries, but also read a book like Buffettology by Mary Buffett and David Clark so as to avoid making some very big mistakes.

I say this because the author tries to sell the reader on the growth potential in energy, telecommunications and water, especially in developing countries (without, at the same time, disclosing that the median, and not the average, incomes in many of these nations generally precludes the vast majority of these inhabitants from ever having access to these essential services). The author also tries to sell the reader and potential investor on the merits of size and diversification (from the standpoint of generating capacity within a firm and from participation in activities spanning two or more regions or countries), but the author does not disclose the risks associated size or diversification as they relate to the energy and natural resources businesses in particular. The reader/potential investor should note that Calpine Corp. had size going for it, but is now in Chapter 11, and who can forget Enron, which was heavily diversified and a global heavy-hitter, but now is the nation's most spectacular bankruptcy. You could argue that Calpine failed because of its near total exposure to California, and you could also argue that Enron failed because of its fraudulent accounting practices, but one thing is certain: at the level of play for these companies(which runs into the hundreds of billions easily), even a small mis-step can lead to disaster.

Warren Buffett has publicly referred to derivative instruments as 'financial weapons of mass destruction'. The use of derivatives in these industries has received absolutely no treatment in this book. The next great financial catastrophe is highly likely to involve derivatives and a critical service, so potential investors would do very well to scrutinize this aspect of any crtical services purchase.

In sum, this book did a very good job of making clear how the energy, telecom and water services got to be the way they are, and gave an accurate snapshot of the key factors at work in each industry. However, the information in this text represents about one third of the information you need to know in order to invest successfully in any critical service. Written in 2002, because of the turbulent nature of the critical services industries, the contents are already dated for the most part, and are only of use from a historical standpoint. In the future, the author would do well to write an update to this book which would explore the ever more complex regulatory and financial landscape, and also include some coverage on the waste disposal industry, another critical service that has promise as well.

Given the confusing stories about Enron, the collapse of other power companies and the decline of tech stocks, this book provides a solid and authoritative look at utilities, telephone and other related industries. The book is useful in that it provides a historical perspective as well as practical view that investors can use to help them make sounder decisions.

A very well written, balanced and unbiased update on our power situation.

The author is not trying to "push" his viewpoint but rather attempts to show us where we are and what we should be thinking about to start us on the road to a new power infrastructure.

Highly recommended for the individual and the Wall Street Analyst.