The New Magic Bullet
By Tom Dyson
June 15, 2007

Every year our publisher – Porter Stansberry – sends out a spoof stock recommendation or a fake newsletter issue on April Fools' Day.

One year, he described how a mysterious stranger led him to a fantastic gold field in Africa. Rather than dig conventional mines, the miners were skimming the surface with bulldozers... churning up gold nuggets the size of your fist. The fictional company – which was set for something like a tenfold increase in share price – carried the stock ticker SUKR. Thousands were salivating to buy shares.

The next year, the story was about a hedge fund that promised absurd dividend payments... about 10% per quarter with zero risk. Again, thousands of people were ready to buy the spoof stock. Symbol? BS.

Anyway, the investment I'm about to tell you about today reads like one of Porter's April Fools' jokes. Except it is real. Early investors could make a fortune.

Experts have discovered a crop that can produce diesel fuel... at the same price as regular diesel fuel. Sounds unbelievable, huh? Just think about that for a moment. This plant is going to revolutionize transportation...

- This fuel produces 78% less carbon emissions than regular diesel, so it's popular with the renewable-energy crowd.

- This plant grows anywhere, like a weed, including deserts. Proof: The Saudis are building a plantation on 100,000 hectares of desert right now. In contrast, palm oil is the current choice for biodiesel production in most of the world... but growers must clear massive swathes of rainforest to plant it.

- This plant cannot be eaten by humans. It does not compete with food demand, therefore it is much cheaper than corn or soybeans.

- This plant cannot be eaten by humans, therefore you can irrigate it with any water you want. It doesn't have to be clean water. Water it with water from the nuclear-waste processing facility if you want.

- This plant yields four times as much oil as soybeans, but costs half as much to produce. Soybeans are the cash crop of choice in the U.S. to make biodiesel today.

Basically, this is the perfect plant for making biodiesel... and that's very important.

The world is crazy for renewable energy... crazy enough to put up $19 billion just looking for renewable energy investments. The European Union has mandated that all cars must run on 20% biodiesel by 2020... the UK is introducing similar legislation right now.

India imports 70% of its fuel for transportation. Other Third World countries find themselves in similar situations. In India, there's a strong movement to use biofuels. It's a very fertile country, with more arable land than any other country on earth, including Brazil. India thinks it can grow its diesel cheaper than importing it.

This isn't pie-in-the-sky stuff. Big Oil and big government are getting interested in the plant known as... jatropha.

The government-owned China National Offshore Oil Corp. (CNOOC) is planning to have 80,000 acres of jatropha in Sichuan Province alone by 2010.

Renova Biodiesel of Brazil is expected to plant 60,000 acres of jatropha, and reports suggest that other oil companies are considering planting nearly 500,000 acres in the next four years.

D1 Oils, a British company considered by many to be the leader in cultivation, has plantations from Swaziland to Indonesia and hopes to nearly double its 385,000 acres of jatropha worldwide by the end of 2008.

The Philippine National Oil Co. recently earmarked $14 million for jatropha planting and production, while Indonesia plans to set up 52 biodiesel plants across the country at a cost of $7.3 million.

And get this...

The Saudis are starting to grow jatropha and build refineries to turn its oil into biodiesel! They can plant this stuff in the desert and use sewage water to irrigate it.

OK, I said that this diesel is competitive in price with regular diesel. That's not quite true... yet. Scientists say biodiesel from jatropha will be competitive in price with regular diesel very soon, without government subsidies.

Is this risky? Sure. New technologies always are. But the idea makes sense, and it's easy to understand. Besides, the way renewable energy has caught the public's attention and with all the money looking to invest in it, I think jatropha could be worth a small investment.

Good investing, Tom Editor's note: Tom Dyson is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments. Sign up today to read more investment ideas from Tom Dyson.