Book Review: Profiting From Clean Energy
I received, about a month ago, a complimentary copy of Profiting From Clean Energy, a recent book on investing in alternative energy by investment analyst Richard W Asplund. I will do a short review of the book here, as it may be of interest to some of our readers.
Just so that there are no doubts lingering in your minds as you read through my review, neither AltEnergyStocks.com nor I is receiving any compensation for doing this other than a free book. Should you want your book reviewed here, feel free to contact us and make a request.
Profiting From Clean Energy covers 13 sub-sectors of the clean energy space: solar (PV and thermal); wind; fuel cells; geothermal; cleaner utilities; power efficiency; smart meters; power storage and backup; clean transportation; ethanol and biofuels; trading in biofuel feedstocks; coal; and carbon trading. The book also discusses macro-drivers for alternative energy (e.g. concerns about climate change, energy security, government incentive programs, etc.) and provides growth forecasts. Profiting From Clean Energy opens with a review of the various forms of investments one can make in alternative energy (e.g. individual stocks, mutual funds, etc).
The author takes a largely top-down approach to his analysis. He begins at the economy or even the global level, and works his way down to industry dynamics, how the technology works and who the key players are. For each sub-sector, the book provides a comprehensive list of stocks with some basic analysis. Technology discussions are at a level where individuals without engineering training can easily follow, while still providing enough depth to be well-informed when doing further research on a stock or sector.
The core audience for this book is, in my view, investors with limited knowledge of alt energy but who want to get started and need an effective way to learn a lot rapidly. That's not to say more knowledgeable folks won't get any value out of this book. For my part, I learned a fair bit in the geothermal, energy efficiency and net metering sections, as they were sectors I had not, until recently, examined very closely. But I believe this book can provide the most value if you have limited knowledge of clean energy as an industry but have a strong interest in investing in it, and are not sure where to start.
At a broad level, Profiting From Clean Energy is therefore a good resource to get you thinking about what to look for when seeking out investment opportunities in clean energy. The book does not, however, provide tools for fundamental stock analysis. Whereas certain investment books outline detailed models for analysis based on fundamentals and financials, Profiting From Clean Energy is very much about the macro-picture and does not delve deeply into technical financial concepts.
- A very good general overview of the key dynamics driving each sector and clean energy in general. Can therefore provide a good base for stock-specific analysis when assessing a company's competitive positioning.
- A comprehensive list of stocks broken down by sector, along with a wealth of external resources to help push one's research beyond the book. The accompanying website, http://www.profitingfromcleanenergy.com/ (currently under development), will soon provide a list of 50 stocks with profiles, and already has features such as a news service and a free newsletter.
- Easy to read and not overly detailed or technical, yet provides a good level of depth.
The Less Good
- Reading a book about investing in internet technology written in 1997 today would likely not be immensely useful. Similarly, because alt energy is going through a phase of rapid evolution and profound changes, this book is not timeless. Read it now and it can provide a lot of value; wait two years and things will have changed too drastically in certain sectors like solar and clean transportation (unless of course multiple editions are planned).
- In the clean transportation section, I would have liked to see a discussion of rail transportation and opportunities associated with it.
- An close follower of the alt energy space will likely not come across a great deal of new information in the book, although the website is a useful resource. I don't, however, believe that this is unique to Profiting From Clean Energy, but is rather a consequence of the choice an author makes about going for breadth (covering multiple sectors) instead depth (covering only one).