Published: November 24, 2009

I remember the first time I saw Rick Rule. He had his feet on a desk and a microphone in his hand. There was a crowd around him. People were calling out stock symbols. Rick was giving them his thoughts on each company while he lounged back in his chair.

Rick is a mining and energy guy... He manages hundreds of millions of dollars, which he invests in natural resource businesses. Recently, I heard Doug Casey describe the performance of one of Rick's private partnerships. Doug said the fund paid him a 100% dividend for nine or 10 years in a row... and then the final check was for 10 times his money.

Last month in Argentina, I heard Rick give a 30-minute presentation to a room full of investors...

"For the first time in my life," said Rick, "people like Barack Obama and Barbara Streisand think I'm a good guy."

What? Rick Rule has spent the last 40 years figuring out how to dig holes, clear forests, and run pipelines. Socialist politicians and liberal celebrities should hate him. So what's going on?

Rick has started investing in geothermal energy...

At certain spots around the Earth, usually at the boundaries of tectonic plates, heat reaches the surface of the planet in the form of molten rock... or magma. The molten rocks heat the surface water, producing steam.

Geothermal companies harness this steam to drive turbines and produce electricity. Cooling towers turn the steam back into water. The companies inject this water back into the heat source, and the cycle begins again.

Geothermal companies can produce electricity 24 hours a day without any interruption. This energy is cheap, it's clean, it requires no additional fuel, and it's profitable without any government subsidies.

But here's the best part...

The government wants to fight global warming, and it's giving major subsidies to alternative-energy companies. Four weeks ago, the Department of Energy announced it was granting $323 million to 123 geothermal companies in 39 states. And six weeks ago, it announced a program for geothermal companies to get cheap loans, guaranteed by the government.

Rick says you can normally make +10% returns from geothermal energy, but with the government's subsidy, you can now make +18% to +20% returns per year. Rick says geothermal has so much potential over the next 10 years, it's his largest personal speculation right now...

The largest geothermal stock is Ormat Technologies (NYSE: ORA). With a market cap of $1.9 billion, Ormat generates electricity from geothermal heat. It also supplies equipment and builds plants for other geothermal companies. When it comes to geothermal energy in the U.S., Ormat is the elephant.

Right now, I'm waiting for Ormat to close at a new high for the year. When Ormat breaks out, you'll know the geothermal bull market is taking off...

-- Tom Dyson
Editor
Daily Wealth

Editor's Note: This article originally appeared in Daily Wealth.