In trying to keep my head above water in the swirling market seas we’ve been facing, I was tempted to talk about “Negatrend” investment opportunities which I see (the opposite of megatrends). After all, with oil surging, financial stocks purging and markets unable to show any forward wind, we might as well focus on what is going to the bottom of the sea.

Examples of Negatrends would be “old transportation” - 20 airlines have gone bust this year, nobody has “driven a Ford lately”, etc. Traditional media is going the way of the Dodo Bird with the oxygen cut off by the Internet. It’s hard to see how any stocks in these sectors can go up materially.

Another option was to go back to the Oil Bubble theme (“Energy in the Air” -ThinkThoughts 5/31/2008) but with every newspaper headline seemingly about oil prices and the cover story on Barron’s this weekend being “Oil Bubble - When it Will Pop and Why” - we get uncomfortable on the side of conventional wisdom and extremely edgy when we agree with Barron’s. The Economist did an excellent special report on the “The Future of Energy” writing on how green technology is real and is going to be real fast. (link)

Truth be told, while I hate filling up my gas tank with gas prices touching $5 in San Francisco, I love the fact that it will accelerate the innovation and adoption of green technology. Factually, with America currently consuming 25 barrels of oil per capita versus two barrels per capita in China and just one in India, we are going to need a lot more help then just drilling in Alaska or the Chinese raising gas and diesel prices 18% to meet the growing demands of those economies and the others in emerging markets. Energy is roughly 10% of global GDP or $6 trillion - the wind, solar, fuel cell, biomass, nuclear and water companies that create solutions to replace dirty, depleted, foreign and expensive fossil oil will be tomorrow’s Google’s, Cisco’s, Intel’s and Apple’s.

With the entire world being BEARISH and even me wanting to talk about what to be negative about versus what is positive - we must be getting close to when things get better. To get a fresh view, I thought the best place might be to go to the college campus where new graduates were looking to the future and commencement speakers were espousing how to be a life success. In looking for what was happening in 2008, I came across some great commencement speeches from the past which were chalk full of wisdom and inspiration.

Winston Churchill’s commencement speech to the Harrow School in 1941 to “never give in – never, never, never, never, in nothing great or small, large or petty, never give in” is a timeless motivator.

Woody Hayes’ speech to the Ohio State graduating class of 1986 spoke about how “nothing that comes easy is worth a dime. As a matter of fact, I never saw a football player make a tackle with a smile on his face; never.”

Former CEO of Medtronic Earl Bakken’s speech to the University of Hawaii in 2004 who said “never give in to pessimism – if you don’t know that you can’t fly, you can soar like an eagle.”

In what many have called the greatest commencement speech of all time, Steve Jobs told the Stanford graduating class of 2005: “don’t let the noise of others drown out your inner voice, heart or intuition. Stay hungry. Stay foolish. (link)

This year, as in every year, there were great speeches but one that nailed it and gave me a “reboot” to my mission of hunting down the “stars of tomorrow” was J.K. Rowlings’ commencement speech at Harvard a few of weeks ago. As most of us know the lore, at age 28, J.K. was an unwed, jobless mother of a young daughter who had less than no money but a big idea and passion for it to be realized. Her message was how failure can be necessary for success and how imagination is the air for entrepreneurs. Her comment that as she faced incredible adversity “hitting rock bottom was a solid foundation to build life from” is awesome. (link part 1) (link part 2)

Stocks were weak last week with the Dow off 3.8%, the S&P 500 down 3.1%, NASDAQ was down 2.0%, the ThinkGrowth Index was off 0.8% and the Russell 2000 was down 1.1%. Advancers trailed decliners 1 to 3, and companies making new highs versus new lows was of similar proportion.

On a very positive note, a staggering $22 billion of inflows came into equity mutual funds last week. At the end of the day, the stock market, like all markets, is a function of supply and demand for which this is a good signal. Year to date, however, there are $23 billion of cash outflows from equity funds.

While it’s tough to be BULLISH when stocks are going down and the world is telling you that you are stupid, we do know that: 1) Earnings and revenue growth drive stock prices over time, we are buying companies growing at 30-60%, and selling at significant discount to their growth rates; 2) Stocks climb a wall of worry and there is a ton to be worried about; 3) Investor’s sentiment couldn’t be worse – which is VERY POSITIVE; 4) It’s time for growth stocks to outperform.