Welcome to the weekend folks. You know, as we continue to wait for the market to make a move we can actually trust, we've had time to do some critical thinking regarding bigger-picture opportunities... huge secular trends, as opposed to cyclical trends. We've come up with a handful so far, but one them has continually risen to the top the list the more digging we do. Today we'd like to paint a picture with some broad industry brush strokes. Even before we get to it though, we want to frame this in the most relevant way possible. Ever heard the term "buy it when nobody wants it, and sell it when everybody wants it"? It's good advice, and has several practical applications whether you're talking about a short-term ebb and flow for a particular stock or talking about a major paradigm shift for an entire industry. Solar power may be one of the best examples of what I'm talking about. Remember back in 2007 and 2008 when advances in solar power technology finally gave legitimate hope that solar panels could be a cost-effective source of energy? All solar stocks went ballistic, and at the same time a wave of new solar panel makers entered the market while existing solar panel manufacturers ramped up their output. It was all well intended, and investors were understandably stoked. The fact of the matter is though, solar power wasn't quite ready for prime time just yet. That's why most solar stocks spent the next four years back-pedaling to their pre-2007 levels. Care to guess what happened in the meantime? A few more advances in solar power technology and a market that finally understood what to do with solar power has made it a viable business... viability that simply wasn't in the cards in 2007 and 2008. Solar panels are hardly the only technology that's gone through that boom-then-bust-then-boom cycle, however (even though most investors have largely overlooked the latter of those "booms"). LED lighting is another one of those ideas that was ready for the market before the market was ready for it. The market's quietly gotten ready for it in the meantime though, well after the 2013 mania died down. Remember Cree (CREE)? It's probably one of the most recognizable names in the LED (light emitting diode) lighting industry, soaring from $28 to $74 over the better part of 2013 as it had the leading LED technology and the most clout to push its products through to users. Two years after peaking at $74, CREE shares were back to $28 because the market still wasn't ready to make the jump to LED lighting in a meaningful way, mostly because people just didn't know enough about their energy-saving potential and government-sponsored rebates for using the technology. Fast forward to today. The technology is (still) ready, AND the market is (finally) ready. Though you're not seeing now anywhere near the amount of buzz LED lighting technologies created three years ago, a solid LED market has quietly developed under our noses. And make no mistake - there's plenty of market to tap into. The final numbers are still being tallied, but at one point not that long ago, the pros were estimating the penetration rate of LED lighting into the world's lighting market was 31%. It's not difficult to recognize as you visit your nearby Lowes or Home Depot that 31% of the bulbs sitting on their shelves aren't LED light bulbs. You're looking in the wrong place though. Think bigger. Specifically, think commercial... the kind of lights and fixtures the average consumer never buys, and rarely sees, but companies buy by the truckload. The commercial LED lighting market was on pace to be worth $27 billion last year. That's up from practically nothing just a few years ago. That said, don't think LED lighting won' t continue to penetrate the consumer market as it continues to become the norm in the commercial market. Some forecasters believe more than two-thirds of the global lighting market will consist of LED light within five years as their cost-savings benefit becomes clearer. Even the more conservative estimates for the five-year growth rate of LED bulbs and fixtures translate into market share of about 50% by then. That may be tough for U.S. investors to believe, as CFL and even incandescent bulbs are still prevalent, as the promise of LED lighting never seemed to become a reality. Again though, you may be looking in the wrong place. While the United States has been a little slow to adopt LED lighting technology, Europe and the Far East have already made it the norm. Europe alone accounts for about a fourth of the world's LED lighting market. Even so, North America's adoption of LED's is finally starting to accelerate with a little help from state and federal government rebate programs. The North American LED market should reach roughly $10 billion by 2020, according to recent forecasts, now that companies are starting to make what would-be buyers actually want. My point is, LED lighting is not just an idea whose time has come, but an idea that can become a profitable business now that production costs of LED lamps are palatable. With all of that being said, all the research we've been doing almost requires we explain what the best LED investments will look like, because they're not all one and the same. The following themes, if you will, are apt to be characteristics of the better names in the business. Solutions providers trump LED bulb makers: Yes, there's a difference. As much work as the LED industry has done to educate consumers and corporations, most of them still can't move forward with a cost-saving LED-driven upgrade or installation plan on their own. The market wants a soup-to-nuts answer to utilize the power of LEDs. (That's why LED bulbs aren't flying off of shelves at stores.) "Vertical integration" is the technical term. The best market to approach may not be the United States: While the U.S. likes to say it's a supporter of green-energy concepts, it's not putting its money where its mouth is. Other countries and regions are. As was noted, Europe, China, and Japan are embracing LED lighting.... with dollars. Form and function must unite: This may be one of the most underappreciated reasons LED lighting got off to such a slow start. That is, no matter what, most early LED bulbs looked clunky, felt industrial, and didn't capitalize on their strength -- saving energy -- in the right places. Said in more direct terms, the residential bulb market wasn't the best place to start the advent of LEDs. This is changing now (finally). For instance, LED street light installations are on pace to grow 400% by 2020. The industry still hasn't done enough yet, however, but that's now changing. Ready to dive in? Great, but before you make any decisions I'll go ahead and let you know today's newsletter is a two-parter. The second half is going to be delivered on Monday morning, right around the time the opening bell rings. In that newsletter we'll have a new LED lighting stock for you to consider. We think you're going to like it too, as it fits all three of the criteria we just described about what a truly-great LED play needs to look like now that the LED lighting industry is ready for prime time. Talk to you Monday morning.