But the hybrid engine isn’t it.
And the hydrogen car isn’t either.

Find out who will be the winner, from the newsletter rated number one for the last five years by the Hulbert Financial Digest.

Dear Reader,

The race is on to design the car of the future. Every player in the industry is scrambling for the prize, and the winner will dominate the world car market for decades.

The three big contenders are the hydrogen fuel cell, the electric hybrid vehicle (like Prius), and the diesel. You’re going to be surprised when I tell you the most likely winner.

What’s more, I’ve identified a “secret play” on the winning technology, ready for your portfolio right now. Let’s take a look at the three cars in this race . . .

The hydrogen fuel cell gets the most hype

Detroit put all its chips on fuel cell technology, and they’ve been telling us since the late 1990s that a breakthrough was just around the corner.

In 1997 German-owned DaimlerChrysler actually predicted 100,000 fuel cell engines on the road by 2005. In 2001 General Motors projected about the same timeline.

Even George Bush got into the act, declaring in his 2003 State of the Union message that “America can lead the world in developing clean, hydrogen-powered automobiles.”

It didn’t happen and it probably won’t

The short explanation for Detroit’s failure is that the engineering problems were bigger than they thought. On top of that the fuel cell engine costs ten times as much as a conventional engine.

Worse yet, there’s also the problem of building a national network of fuel stations where you can fill the tank with hydrogen. Hydrogen isn’t found in nature in a usable form and it’s very expensive to produce. A national hydrogen rollout could cost $100 billion.

There’s still hope that hydrogen will come through in the end, but the National Academy of Sciences believes the “hydrogen economy” is decades away.

Meanwhile, electric hybrids roar ahead

When Toyota announced a heavy investment in electric hybrids a few years back, Detroit snickered. To them it just seemed like a halfway solution on the way to the fuel cell car.

Wrong.

I don’t need to tell you that the electric-hybrid Prius is a sensation, and Detroit is now rushing to play catch-up. They’ll come out with a number of hybrid models in the next few years, many of them using technology licensed from Toyota.

What’s more, the electric hybrid is not just an underpowered small car. Toyota now offers a high-end SUV hybrid with better acceleration than the standard model!

So hybrids are where it’s at, right? Wrong again.

There’s a third alternative, a “sleeper” technology that’s going to surprise everyone. At least, that’s what I think. My name is Kevin Kerr, and I’m the editor of Outstanding Investments, a monthly newsletter plus weekly email updates.

My opinion on the great car race is worth a few minutes of your time, because my newsletter had the best track record of any in the country during the last five years. You can check it out at CBS Newswatch in its independent rating service, the Hulbert Financial Digest.

Readers who followed Outstanding Investments were up 64.2 percent in 2005 and 62 percent the year before that. What’s more, we did it all with stocks, not options, and we traded very little. We buy and hold. So let me tell you how you could stand to make five or ten times your money on the great car race. . .

The Prius has problems

First off, the gas mileage on the Prius is not all it’s cracked up to be. Consumers have noticed, and some aren’t happy.

What happened is that the EPA tests cars and trucks under ideal conditions on a flat surface. In the real world, it looks like Prius’s mileage is not so hot. Also, most of the hybrid’s big mileage gains occur in stop-and-start city traffic. On an open road, the conventional engine actually gets better gas mileage.

When you look at the Prius’s true mileage, there are plenty of conventional vehicles that do as well or better.

Add in the high extra cost of the hybrid engine, and some say you have to drive the car a hundred thousand miles to recoup the extra $9,000 or so you pay for the fancy technology.

And the winner is. . .

The humble old diesel engine –the third and final competitor for Car of the Future.

How can that be? Diesels are loud, dirty and smelly. A pollution nightmare.

You can hear a diesel truck from a mile away, see the soot from halfway down the block, and smell the exhaust as it rolls by.

Except - surprise - those diesels you hear and smell are antiques. Thanks to new technology, diesels aren’t so dirty anymore and the gas mileage is better than ever!

Here’s what happened: Europeans have to pay heavy gasoline taxes and they worry about global warming, so they invested in the diesel engine as a stopgap, just in case the hydrogen car hit a snag.

As you know, hydrogen DID hit a snag. Now the stopgap looks like the winner in the great auto race.

You see, diesel gets about 30 percent more miles to the gallon than gasoline, and those savings are real, in any kind of driving conditions. What’s more, people who worry about global warming prefer diesel because it emits up to 20 percent less carbon dioxide. But wait, it gets even better. . .

Diesels have a huge, surprise advantage

Diesels now rival traditional gasoline engines for quiet, and European refineries have removed most of the pollutants from the fuel. The engines cost more, but the gas savings almost make up the difference. I’ll tell you a sleeper stock - not a car company - that’s the best way to play the diesel revolution.

But meanwhile there’s an even better way to invest than the hardware under the hood. Diesel’s biggest edge is something you’d never expect. . .

You don’t need crude oil to make diesel fuel

You can make it from coal, plant matter, or even cooking oil. (No kidding! A restaurant can invest in a cooking oil converter kit that lets you fry a batch of potatoes and later reuse the oil in your delivery truck.)

In a few pages, I explain how liquefied coal is one of the big technologies of the future no matter what, whether the diesel engine wins or not. But if diesel wins the auto race, coal will be the biggest thing since folks traded in their horses for cars. King Crude may be dead, once and for all.

How bad does the world need these new technologies? REAL bad. Later in this report, I’ll tell you some really shocking news about the outlook for oil prices. My readers have already profited, with one pick up 496 percent as this is written, and two others up 140 percent and 430 percent.

We reaped those gains because, whatever the future holds, the oil crisis right now is bad enough. . .

In India they make fuel from cow dung

Every year and indeed every month the world will grow more desperate for the alternative fuels and technologies I talk about in the next few pages.

India imports more than 75 percent of its crude oil. They’re so desperate for alternatives they recently promoted cow dung as an important energy source. A new use for sacred cows!

The problem is, Asians these days are buying cars like. . .well, like Americans.

The Chinese would have to buy 650 million vehicles to reach American levels of car ownership! That’s not likely. But a fraction of that figure will create an oil and pollution crisis big enough to finish us off.

In the vast markets of India and China, a vehicle that runs without crude oil will be irresistible. But there’s still more to the diesel story. . .

A hybrid diesel engine is the next step

A combination of hybrid and diesel technology will take the fuel savings up a notch. Make that two notches. And it will happen soon.

An MIT study predicts the diesel hybrid could outperform a hydrogen fuel cell engine on both gasoline mileage and carbon emissions - within ten years.

In other words, the hydrogen fuel cell car may never get to market. It’s dead in the cradle thanks to breakthroughs elsewhere.

Is there a catch? And how can you make money?

There is indeed a catch to all this, but the catch is where you’ll find the profit opportunity.

The obvious play is to buy the big automakers like Toyota that own the leading hybrid or diesel technologies.

Obvious, but wrong. The auto industry is on its way to becoming a replay of the airline industry. The competition is already cutthroat, with razor-thin margins. Now we’re going to see General Motors and Ford file for bankruptcy.

Once they’re operating under Chapter Eleven, like the airlines, the auto makers will launch profit-killing price wars that may last for decades.

Emissions are the key to profits

No, the way to profit from the diesel revolution is to buy the company that’s going to remove the last obstacle that stands in the diesel’s way: pollutants.

You see, the Europeans still haven’t been able to remove the last bit of filth from diesel exhaust. They’ve just put up with it for the sake of fuel economy and lower carbon emissions.

Whoever comes up with the best diesel tailpipe solution stands to make a killing. And a high-tech American company has done exactly that. They’ve come up with a diesel filter that’s far superior to what the Europeans now have.

A very surprising angle will make you money

Diesel tailpipes will be a billion-dollar market within two years - an increase of more than 80-fold from the year 2000. As the oil shortage deepens and the world scrambles for fuel mileage, the company I’m telling you about will be on every front page in the country.

This company is a technology leader that created one of the most important inventions of the ’90s telecomm boom - but I’m not talking about Microsoft or Intel or Sun or any of the obvious choices. The company I have in mind keeps a lower profile.

Now they’ve come up with ANOTHER breakthrough technology that few investors know about.

My crystal ball says their technology is going to wind up in 200 million vehicles. I’ll tell you all about the stock in a FREE Special Investment Report called Tailpipe Riches: The Race to Build the Car of the Future. It’s one of four free reports you get when you subscribe.

You can click here to subscribe and get your free copy. You’ll want to snap up this breakthrough technology before it’s too late.

But meanwhile you can also make a bundle off the liquefied coal story. . .

The Great Coal Rush
It’s clean, cheap, and soon it will be liquid

In a moment I’m going to reveal why the oil shortage is a lot worse than you’ve been told.

But while the oil runs out, there’s still plenty of coal. The world has enough coal to last for 300 years at current rates. Already coal accounts for more than half of our electricity.

But coal is dirty, right? And there’s no way it can power cars, right?

Wrong, and wrong again. Coal can be cleaned up AND it can power your SUV. However, it’s not cheap to do. It’s only worthwhile when a barrel of oil costs more than $35.

Which means you’re in luck if you own stock in a coal company, as my readers do, because oil is way more than $35 a barrel and it’s a good bet it will stay there. Forever.

As I write this, my readers sport an 88 percent gain on my coal recommendation.

Coal is set to replace oil almost everywhere

You’re now one of a handful of people who know about clean coal and you’re going to make a fortune off it. I want to send you all the details in another FREE Special Investment Report called Turning on the Juice: Power Plays for the Electricity Crisis Ahead. It’s one of four reports I send to all new subscribers.

Let’s look at how big the opportunity really is. . .

The U.S. and China both have a growing problem with the price of oil and with the unstable countries they have to buy it from. Meanwhile, the U.S. and China both have HUGE reserves of coal.

Add in Australia and Canada and you’ve got four countries that you could call the OPEC of coal. They own just about all the coal there is.

The U.S. alone has 254 billion tons of proven coal reserves, or about 25 percent of the world total. Compare that to Saudi Arabia, with 24 percent of the world’s oil, or so they say. As I’ll explain in a moment, they’re lying.

Meanwhile, the Chinese economy is doubling every ten years and has a lion’s appetite for electricity. The Chinese will have to give up that growth rate or build hundreds of new power plants, one or the other. They have no choice.

China is starved for electricity. . .
And we’re not doing so well ourselves!

Electricity could be China’s biggest roadblock to growth. Already, blackouts and brownouts happen every day all over the country. Factories by the thousand are forced to shut down from time to time. Many are allowed to operate only during off-peak hours. Children in some cities do their homework by candlelight.

With an economy that grows eight or nine percent every year, and electric usage soaring at the same rate, the Chinese have no choice but to build hundreds of new power plants. And most of those plants are going to run on coal.

In the United States we have a power crisis of our own. We’re at the limit of our generating capacity. We have our own brownouts during peak-demand times. We, too, need to build hundreds of new power plants. Yet the public still doesn’t want nuclear power.

A coal boom is inevitable

You do the math: we face a crude oil shortage. . .nuclear power gives people the willies. . .we’ve got plenty of coal in the ground. . .we’ve got a choice between more power plants or deep recession and unemployment.

Everything points to coal.

As this goes to press, my readers have gained 88 percent on my favorite coal investment. You’ll get details on the company in the free Special Investment Report called Turning on the Juice: Power Plays for the Electricity Crisis Ahead.

The gains have just begun. We can thank ever-increasing demand for coal and ever-higher prices. All that’s left is to solve the pollution problem. And as you’ll see in the next few pages, that’s about to happen. I’ve got a way you can play the technology.

A safe, conservative way to play the Great Coal Rush

Coal is going to play a key role in our energy future. The safest way to profit is to own some coal and wait for the price to go up. It will.

I’ve found a great, long-term stock to own that just came on the market in 2004, as a spin-off from another company. Already, this new kid on the block is one of the five largest coal companies in the United States, with 13 mines in our richest coal regions, plus 100 electric power plants in 29 different states.

This outfit has a staggering 1.8 billion tons of proven and probable coal reserves. That’s enough to last 28 years at current rates of production.

The top execs have an average of 26 years of experience apiece. They employ the most advanced technology and achieve some of the highest levels of efficiency of any coal producer on the market. With an abundant, cheap replacement for oil, these guys just about can’t go wrong. Their coal is going to look better and better with oil at $50, $70 and even $100 per barrel. You’ll receive all the details in Turning on the Juice: Power Plays for the Electricity Crisis Ahead.But the FREE report also gives you another coal play - a company with a much higher upside. Let me tell you about it. . .

Clean Coal is Here

Two things stand in the way of coal. One of them is pollution and the other is the cost of moving the stuff.

China gets about two-thirds of its energy from coal, and it shows. Sixteen of the world’s twenty most polluted cities are in China. No kidding, the place is filthy. China has just about the worst air and water quality in the world, resulting in epidemic health problems.

Here in the United States, we’ve spent hard dollars to keep coal dirt out of our air. Even so, political quarrels still rage over coal-fired power plants. Now people also worry about global warming. Dirty coal is a problem.

In both countries, the economic growth we enjoy is about to collide head-on with our desire for clean air.

What a great opportunity to get rich! Every breakthrough in clean coal technology could be worth billions to investors. And here’s one for your portfolio. . .

Liquid coal to the rescue

The most promising technology right now is called coal liquefaction. I won’t go into the engineering details, but the end result is a liquid fuel that burns clean, without sulfur and other pollutants. Any power plant that burns coal (that is, nearly all of them) can burn the liquid, too.

And the diesels of the future will burn it, too.

But what really propels this new technology, short term, is the second problem I mentioned - the cost of transporting coal. Most of China’s vast coal reserves are in the north, while most of its industrial development is in the south.

China’s rail and highway network is not up to the job of moving so much coal across such a vast distance. As I write this, southern China actually imports coal from abroad. It’s as if Hawaii imported pineapples. But the Chinese in the south have had no choice. Until now, that is. . .

Liquefied coal can move through a pipeline, like petroleum.

Liquefied coal doesn’t have to move on trains or trucks over expensive road and rail networks. It can flow through a pipe.

Add up all the advantages, and liquefied coal can solve China’s biggest energy problems. It’s clean, it’s easy to move, and they don’t have to buy it from foreigners.

The Chinese leadership doesn’t have to debate everything for years the way we do in the States. They’re moving aggressively into liquefied coal NOW. In fact, they aim to replace ten percent of their current oil imports with liquid coal by 2013.

That’s fast! They’ve already started to build. . .

The world’s first commercial coal-to-liquid fuel plant

What’s more, they’ve got three more plants on the drawing boards. Big players like Royal Dutch/Shell own a piece of the project, but liquefied coal is a drop in the ocean for a big company like Shell. Shell’s stock won’t get much of a bounce.

Instead, let me tell you about a smaller company — a better way to play this big Chinese “moon project.” It’s in your Special Investment Report, Turning on the Juice: Power Plays for the Electricity Crisis Ahead.

You can receive this report FREE, plus Tailpipe Riches: The Race to Build the Car of the Future. In fact, you can receive up to seven Special Investment Reports free when you try my newsletter Outstanding Investments (at no risk or obligation, of course). Click here if you’d like to order.Turning on the Juice tips my readers to a little-known American company that holds clean coal technology the Chinese have got to have. You’ve still got time to buy - this is a long-term core holding that will pay for a big chunk of your retirement.

You’ll discover everything you need to know in the free Special Investment Reports. Plus other breakthrough replacements for crude oil. You see, with the help of this report you can. . .

Profit from something few investors know

The Chinese are turning their country into an open-air lab to develop new energy technologies. The new technologies that come out of their efforts will be exported all over the world. Later in this letter I’ll tell you about their breakthrough in nuclear technology.

The American company that’s helping China liquefy coal is doing the same thing in India, another giant country with almost no oil. They’ve also got a stake in a big Philippine deal.

In other words, they’re the technology leader in a fast-growing industry most investors don’t even know about.

And if diesels powered by liquefied coal become the car of the future, there’s no telling how high my coal picks can go!

While most investors wait for the price of oil to come down and for things to return to “normal,” you can position yourself to profit from the new, long-term energy crisis.