New Flyer: Alternative Drive Systems Superstar

Betting against the oil markets these days can be painful. I learned that lesson last week when I took out a small short position only to get whipsawed two days later as oil surged again and took me to the woodshed. As an old market sage once said: "Markets can stay irrational longer than you can stay solvent". So I started looking at companies that might benefit indirectly from the huge run-up we've had in gasoline prices.

It goes without saying that oil drillers and service companies will do well, as will the producers. Honda (HMC) and Toyota (TM) could do okay but the American consumer is tapped out so I'm not a buyer of those stocks now. However, more people are parking their SUVs and are riding their bikes or taking public transportation to work. That means municipalities will have to keep buying buses, particularly fuel-efficient ones, which in turn means that some of the bus manufacturers will be doing a lot of business over the next few years. GM (GM) may be closing its pick-up truck plants but you can bet that no one will be shutting down bus production lines.