Twelve Green Investment Themes From Putin’s War on Ukraine
By Tom Konrad, Ph.D., CFA
Horrific, Tragic, Unprovoked, Heartbreaking. There is no lack of adjectives to describe Putin’s war on Ukraine. And while there probably can’t be too much coverage of the tragedies and war crimes, many others can write those far better than I.
As an economic and stock market commentator, the adjective I will focus on is world-changing. There is no doubt that the first land war in Europe since World War II, piled on top of a global pandemic, is already reshaping the economy in dramatic ways.
Some of those changes, like Europe switching away from Russian gas and...
When Market Calls are Wrong
Tom Konrad, Ph.D., CFA. My recent market call now looks premature. What lessons can we learn? When we make market predictions, we will inevitably be wrong some of the time. I stuck my neck out at the start of June, saying "We're near the peak." I later gave some numbers to allow readers to objectively judge if that call was right or wrong. I said that we should consider it an accurate call if the S&P 500 fell 20% (to 756) before it rose 5% (to 992.) The S&P 500 has not yet come near 756, but it closed...
Asking the Right Questions: Why Invest in Clean Energy?
Tom Konrad, Ph.D., CFA Often, knowing more about a company is less useful than knowing just a few of the right things. Knowing the right questions to ask can help investors wade through a sea of mostly irrelevant information. Take a moment to answer the following poll: Suppose you want to know if fictional solar Company MySolar will outperform other solar stocks. Which fact would be most useful in your decision?(poll) The key to this question was the stated goal of "outperforming other solar stocks." An investor who is only hoping to achieve returns equal...
Market Call: We’re Near the Peak
Tom Konrad, Ph.D. The current rally from the March 5 bottom has been breathtaking, especially in Clean Energy, with my Clean Energy Tracking Portfolio up 70.5% since it was assembled at the end of February (as of May 1), 11% higher than it was at the three month update last week, and the S&P 500 is up 41% from its March low. Even in a better economic climate, gains of this magnitude would have me running for cover. In the current economic climate, with a gigantic mountain of debt keeping consumers out of the stores, makes me feel this...
SALT: Buying the Balitc Dry Dips
by Tom Konrad, Ph.D. CFA
The Baltic Dry Index (BDI) is a shipping and trade index created by the London-based Baltic Exchange. It measures changes in the cost of transporting various raw materials, such as coal and steel.
Since the BDI is a measure of the income which firms that own dry bulk cargo ships can earn, changes in the BDI tend to drive changes in the stock prices of such companies.
Stock Price Correlation
Until recently, one such company was Scorpio Bulkers (SALT), one of my Ten Clean Energy Stocks for 2021 picks. The chart below shows the last 5 years, with...
Better, or Beta?
Tom Konrad, Ph.D., CFA My Quick Clean Energy Tracking Portfolio has produced unexpected out-performance. Is it because of high beta (β) in a rising market? I recently asked why two portfolios which I had designed to track green energy mutual funds ended up out-performing them by a wide margin. This is the first of a short series of articles looking into possible causes. Could the portfolios be outperforming because the stocks they contain rise more when the market rises (and fall more when the market falls) than do the mutual funds they were designed to track? In...
Green Energy Investing For Beginners, Part I: Stocks, Mutual Funds, or ETFs
Tom Konrad CFA Investing in green energy can be good for both the climate and your wallet. How good depends on choosing the right investment vehicles (mutual funds, ETFs, or stocks) and sectors to invest in. This will get you started. More and more investors are investing in green energy. According to the Cleantech Group, the Cleantech sector is now the largest sector for venture capital investment. Green Energy is not just for venture capitalists. Small investors have done well in 2009. Since the market bottomed at the start of March, the average green energy mutual fund topped...
Why I Sold My Utility Stocks
In times like these of financial uncertainty, regulated utilities have traditionally been considered a safe haven. But that is changing. The Dow Jones Utilities Average was down 30% in 2008, vs. a 34% drop in the Dow Industrials. Not much of a safe haven. In a recent interview, utilities analyst Daniel Scotto noted, that the utility industry offers "a lot less security" than it used to. His reasoning is based mainly on the fact that the regulated portion of utility company's business is smaller than it has been in previous recessions, making them vulnerable to lower growth (or even...
What I’m Selling (and will be Buying) in the Market Turmoil
The market is in turmoil, and it seems like everyone I talk to wants my take on what's happening this week. So here's my take: I really don't know if the various bailouts and decisions not to bail out made by Paulson et al will turn out to be good decisions or not. I do know that the mess we're in is due to hard decisions which have been put off for years at the highest levels, and I do know that the American taxpayer is going to be feeling the pain for a generation, if not...
An Elephant Hunter Explains Market Dynamics
John Petersen Friday afternoon was a strange time for Axion Power International (AXPW.OB). After trading 200,000 shares early in the day, Axion filed $28 million mixed shelf registration with the SEC at about one o'clock and the fly on the wall reported the filing within minutes. It seems that some stockholders were spooked by the news and assumed that Axion would sell stock right away instead of waiting for the fall deal season. Their knee-jerk selling shoved another 1.1 million shares into the market in three hours and made Friday the second heaviest trading day in Axion's history....
Ten Clean Energy Stocks for 2020: Trades
by Tom Konrad Ph.D., CFA
Four weeks ago, I predicted that the 12% market correction we had seen would turn into a true bear market. Bear markets are often defined as a decline of more than 20% for the major market indexes, but I find it more useful to focus on long term changes in investor sentiment.
What I did not predict was just how severe the effect of the coronovirus shutdown would be on the economy. I thought we would need the combined of the effect of the shutdown and investors re-assessing their risk tolerance to bring us into full...
State of the Union Address: Alt Energy Sectors and Stocks to Watch
So it came and went, the much anticipated State of the Union Address. While the pundits will inevitably focus the bulk of their attention and commentary on the Iraq question, there were undoubtedly some very interesting nuggets of alt energy info in that speech. Above all things, one crucial variable has changed from a year ago: Congress is now controlled by the Democrats and already the slew of alt energy and climate change proposals brought forth by various senators leads one to believe that, as far as the federal government is concerned, 07' should see more than just...
Green Energy Investing For Beginners: How Many Stocks Should You Own?
Tom Konrad, CFA In stock portfolios, deciding how many stocks to own involves weighing a trade off. A smaller portfolio can be built (and sold) with fewer commissions, and also requires less time to research. On the other hand, a portfolio with fewer stocks will gain fewer benefits of diversification, and likely be both more volatile and harder to sell in a crisis. These trade offs are also affected by the size of the portfolio, and the market capitalization and liquidity of the companies in the portfolio. Diversification is widely accepted as a nearly costless way to reduce...
An Investor’s Reaction to a Trump Victory
See my response here: https://www.greentechmedia.com/articles/read/how-one-clean-energy-investor-is-reacting-to-a-trump-victory Tom Konrad
How Free Commissions Change The Game For Small Investors
Why Free Commissions are a Game-Changer For Small Investors
by Tom Konrad, Ph.D. CFA
Last month, Charles Schwab (SCHW), E-Trade (ETFC), and Ameritrade (AMTD) all dropped their commissions for online stock trades to $0. They also dropped commissions on options contract to $0.65 per contract.
The change opens up cost-effective individual stock investing to even the smallest investor, and also allows many more investors to use option strategies. For those wondering if there is a catch, and how these brokers will make money with $0 commissions, see here. The short version is that they make money on your cash deposits, and from...
This Isn’t What Green Money Management Looks Like
Tom Konrad, Ph.D., CFA
I don’t spend much time reading investment company ESG reports, but a friend asked me to take a look at a copy of the TIAA’s 2021 Climate Report. I was deeply unimpressed. Here are a few things in the report that triggered my greenwashing radar:
TIAA wants to work with companies to improve their behavior. They call this company engagement. “e do not expect to account for the majority of our emissions reduction — we are primarily focused on company engagements” page 9.
Much of TIAA’s emphasis is on reducing emissions from their own operations,...
