Tom Konrad

Green Energy Investing for Beginners, Part I

Thanks for the complement, but don't get too excited. As I said, "it's impossible to say if my 1 3/4 year track record is skill or luck, but at least the costs are low." or, in other words, "Past performance is no guarantee of future results."

I will try, though. And the costs will stay low.

On Nov 08 08:02 PM DLB40 wrote:

> " My ten green stocks for 2008 lost 55% that year, but this was still
> better than all the ETFs and all but one of the mutual funds in 2008.
> Most of these lost between 60% and 70% of their value in 2008. In
> the first three quarters of 2009, my ten picks returned 41.5%, handily
> beating the green ETF I chose as a benchmark"
>
> Wow I can hardly wait for the new list!!!

Geothermal Companies Receive Cost Sharing Grants

I have not looked into Magma. It was interesting that Magma got a big grant from DOE, but I haven't spent the time looking at the company yet in order to render an opinion.


On Nov 05 07:10 PM The Geoffster wrote:

> What do you think of Magma Energy?

Geothermal Companies Receive Cost Sharing Grants

20/20-
In fact, most of the geothermal industry is like the mining exploration industry: they acquire mineral rights and drill to find hot water. Saying this is not an industry is like saying oil wildcatters are not an industry.
Vertically Ormat actually supplies far more turbines to geothermal projects than UTX (used only by Raser, as far as I know.) Ormat is a vertically integrated geothermal company, from exploration to drilling to turbines to production.

Read my geothermal industry primer to get a better understanding of the companies involved.
www.altenergystocks.co...


On Nov 02 12:33 PM 20-20 Hind sight wrote:

> There is no such thing as a geothermal "industry." At most, they
> apply for licenses and do some engineering. The machinery installed
> are off-the-shelf units from giants like UTX.
>
> For obvious reasons, good geothermal sites are far from electricity
> consumers.
>
> Geothermal is an intriguing concept (who doesn't like free energy?)
> but it will never be a mainstream business for investors to profit
> from. IMHO

Green Energy Experts: Why Do They Buy Solars?

HJ- Will deal with each point in turn.

1) Successful investing requires work. People who don't want to work make dumb investments. There are lots of people who don't want to work.

2) The number of solar cos is a reason to stay away. The industry is too competitive. The number of solar companies is also the *product* of the unfortunate tendency for investors to favor solar. VCs make the same mistake small investors do, and because of the popularity of the sector, it's easier for the company to IPO.

3) Agreed. I've nothing to add.

4) The ETF I listed, PTRP, contains both bicycles and mass transit. I also list a bus stock (New Flyer=Mass Transit). There are more mass transit plays here: www.altenergystocks.co...


On Oct 30 11:32 AM H.J. Huneycutt wrote:

> I largely agree with you --- solar is sexier in investing circles,
> in spite of the fact that it's one of the least promising solutions
> to energy concerns.
>
> I'm not precisely sure why people like solar so much, but here are
> a few thoughts:
>
> (1) Everyone understands solar power on some basic level. In fact,
> most of us have owned solar powered calculators and seen solar in
> action before. Whereas, how many average Joes understand geothermal
> power?
>
> (2) There are a lot more recognizable pure-play solar companies out
> there than companies in other cleantech related industries. It's
> difficult to find pure-play wind providers that are not OTC; but
> you can find dozens of solar companies. The competing solar manufacturers
> seem to have an emotional appeal to investors because there's a "who's
> going to win?" factor and comparability.
>
> (3) Some of the companies operating in the cleantech sphere are basically
> conglomerates. For instance, ABB's a great company, but they are
> like the GE of Europe (without the financial junk). It's a good
> investment, but it's not a fun company to analyze and they have their
> foot in so many different things, it's difficult to follow them all,
> so investors don't really understand them as well.
>
> (4) You mention investing in bicycles and mass transit --- you're
> absolutely right that these are better solutions than supposedly
> "fuel efficient" cars that don't really solve most of our problems.
> But the problem is --- how do you invest in bicycles and mass transit?
> Maybe you know of bicycle manufacturers sold on public markets, but
> I don't --- and I've looked before. Mass transit is difficult to
> invest in as well; most providers are publicly-owned. The only way
> to play it is to buy into manufacturers that make products related
> to mass transit like railcar manufacturers. But I don't think most
> people think that far and "finished products" are much sexier than
> "materials used for the manufacture of ..."
>
>
> I've become increasingly skeptical of the solar sector, but if I
> had to pick companies in that sector, I like LDK Solar (seekingalpha.com/symbo...)
> and Evergreen Solar (seekingalpha.com/symbo...) the most.
> ESLR probably manufacturers the highest quality solar panels and
> I think they have some of the best minds on the engineering side
> working for them. Still, I have my doubts about the sector in general.

Green Energy Experts: Why Do They Buy Solars?

VPratt,
It sounds like your DD is from the "Dating" school of economics. A very important school of economics, but I'm not sure you're applying it correctly. What is sexier: a small account filled with sexy stocks, or a large one filled with boring stocks?

I'm not telling you not to buy a Tesla to cruise and try to pick up chicks in. I'm telling you that you'll make more money and more likely be able to buy that Tesla in 5-10 years if you buy Energy Efficiency stocks than if you buy Solar stocks today.


On Oct 29 05:22 PM vpratt51 wrote:

> I completely get your point. But there are only so many dull areas
> we can tolerate. Solar has the "cool" factor that chicks just dig
> more than ions and lead plates, or worse, carbon sequestering (it
> even sounds nasty). Just tell a lady that her photons knock your
> electrons off, and your on second base. My DD may be from a different
> school of economics.

Green Energy Experts: Why Do They Buy Solars?

Looks like I touched a few raw nerves. I'll take that as confirmation of my belief that people are emotionally attached to their investments in solar stocks.

I'm not saying that solar is not green or that it is always uneconomic... but there are a lot of things that are greener and more economic... why not invest in those instead of solar?

In the end, robdoc is right... in 5-10 years, some of us will be richer, and the rest will be coming up with excuses as to why they are not.

Shale Gas: Promises, Promises, Promises

Thanks for the correction Douglas. As I said in the article, I'm no gas expert, and don't pay attention to it. I admit not to have my Bcf and BTU straight, but the criticisms of yield curves are not mine, they are Dr. Berman's.


On Oct 26 12:51 PM Douglas Korthof wrote:

> "...A $7-$8/Bcf..." s/b per 1000 cu. ft. or 1 million BTU, not billion
> cubic feet. Typo, but one wonders: when slinging numbers like billions
> of cubic feet and proposing differing models of declining yield curves,
> how much is pure B.S.?

Investing in Clean Energy: Asking the Right Questions

VPratt,
Very real anecdotes. My wife likes to call the stock market "legalized gambling" and far too many people treat it that way.

Even worse than stockmarket gambling is the bigger gamble we're all taking with the planet, as you point out so eloquently.


On Oct 23 01:58 PM vpratt51 wrote:

> Tom, I am glad you reach for new perspectives. I enjoyed this one.
> It should prove it's worth over time.
>
> I am probably among the lowliest of all investors. For many years
> now, I have been a clerk in a convenience store, working hard, honestly,
> and trying to grow my retirement funds. A side effect is that I
> have been witness to immense stupidity (and more than a few crimes).
> The most glaring example is in the sale of scratch lottery tickets.
> The people who buy them REFUSE to accept reality and the most basic
> logic. Among the questions and comments:
>
> "Which one wins the most?" (the odds are all the same)
> "My boyfriend buys them all the time and never loses!" (sure, babe)
>
> "You can't win if you don't play." (you can't LOSE if you don't
> play)
> "I won a dollar." (no, you just got your dollar back and lost on
> the other four tickets you bought)
> "I don't know why I keep buying them, I never win. Give me four
> more."
> "That's ten losers in a row. The next one HAS to be a winner."<br/>
>
> The most accurate statement, often coming from the more open minded
> and logical gamblers, is that it is the "stupid people's tax". (give
> me four more).
>
> So it is no surprise that some vested interests in our economy are
> able to count on, and encourage, denial of scientific consensus.
> "Ignore those geeks in the lab coats! Rolllll them dice again!
> Daddy wants a new Hummer."
>
> There are climate models based on long term cycles in which we should
> be entering a cooling trend with glaciers advancing. If those were
> taken into account, it makes global warming twice as alarming.
>
>
> But don't worry. It's just one planet. The next one's GOT to be
> a winner.
>
> End of rant. Thank you for you kind indulgence.
> Paxman

Investing in Clean Energy: Asking the Right Questions

Thanks Alan. I agree that the timing of these decisions is critical. I have been focused on investing in green energy since 2005, and have see the mood of the country swing in our favor in that time. This trend, along with growing political support, has helped green stocks over that period... see this article from the spring:www.altenergystocks.co...

I think the trend will continue, but I could easily be wrong about that.


As for the mindless Climate denial above, this is also an opportunity for a savvy investor... we have to put up with their inane comments, but at least we can profit from their inane investments.


On Oct 23 10:29 AM Alan Young wrote:

> Instead of rehashing the "global warming wars" like every other thread,
> I'd like to focus on the (relatively) fresh point Tom is trying to
> make here: you can get an advantage investing in something that other
> people are valuing incorrectly because of their prejudices. That
> is rather profound, I think.
>
> But there's a big problem with it: time. Eventually, reality will
> sink in. But we've known about these issues for 20, even 40 years.
> That's a long time to keep your money tied up in unpopular causes
> that you know eventually will triumph. Or, as the saying goes, "the
> market can remain irrational longer than most of us can remain solvent."
>
>
> There's a time to trade on conviction, and a time to trade on trend.
> The trick is to know which is which.

Investing in Clean Energy: Asking the Right Questions

Thanks Alan... unfortunately, the problem is Seeking Alpha. The original post on my site (which they work from) shows the poll inline, rather than just a link. Although I do see the questions here when I click the link... I don't know why that does not work for you.


On Oct 23 10:21 AM Alan Young wrote:

> Tom, you might want to edit this to incorporate the poll questions
> before you give the answer. I can't see them, even after clicking
> on the link.

What a Portfolio Approach to Climate Policy Means for Your Stock Portfolio

1) your numbers for wind are about 2.5x too high, perhaps you're getting it confused with solar.
2) Energy efficiency is cheaper than coal.
3) China understands climate change, and they are making a stong push to build out both wind and solar.

4) We should not only consider the (reasonable) cost of combating climate change, but also the gigantic cost of destroyed farmland and disasters which will result from not dealing with climate change when we make our decisions.

Comparing Green Energy ETFs

Since these ETFs are index vehicles, you can expect crappy ad well as good companies. The main reasons I see for using ETFs are (1) you don't know more than the index managers, and don't have the time to spend. (2) you're not a large enough investor to invest in many of the foreign stocks in the indexes. This is especially true for the Wind and Clean Transport ETFs.

Nevertheless, I agree with you to the extent that I don't use the ETFs much myself... but then I spend a lot of time looking at individual stocks.


On Oct 14 06:34 PM danno wrote:

> Dear Dr. Konrad:
>
> If you look at the history of the holdings of some of these ETFs
> you'll realize that many of them have managers that don't know squat.
> Of course the managers are learning, but investors are paying them
> to learn at their own expense.
>
> I don't know why you waste your ink on stuff like the cleanedge ETF,
> PBW, or PBD or many of their peers including the water funds. The
> strategy behind so many of these indexes looks like something my
> assembled by a kindergarten class. The funds grab deep in shallow
> industry niches and pick up a lot of crappy companies. Ever see
> a good publicly-traded fuel cell company? Funny, I haven't either.
> What exactly does this "index" track, anyhow?
>
> Sometimes the indexes/ETFs pick companies that are anything but green
> (corn ethanol, "clean" coal, polluting coal plants anyone?), or companies
> that have tiny or exposure to the sector, demonstrates that they
> are either run by the incompetent for the incompetent/lazy investor
> or they are products just out to earn a quick buck. Obviously it's
> both of the above.
>
> Did anyone out there ever notice that some of these indexes/ETFs
> have 6%, 10%, 15% or even 20% of their holdings in one stock? The
> arbs and hedge funds sure have. Ever see what happens when an index
> owns 100-270 days average trading volume of one stock when the quarterly/semiannual/a...
> rebalance happens? The arbs get several days to take the ETF investors
> to the cleaners. Maybe that's the cleanest thing about some of these
> funds.
>
> Or the indexes hold stocks that are either super illiquid or trade
> on some exchange that's closed to foreigners investors (like us Gai-jin)
> so that the ETF can't actually track the index properly.
>
> If you want narrow focus on green/clean energy pick up a solar or
> wind ETF for the short-term directional volatility. For the long
> run, investors and writers should do their home work and look at
> more than just fees.
>
> Who's running these things ? Mickey, Goofy, or Pluto? People work
> really hard to save their money - so they should work just as hard
> to do their homework before then invest it. IMHO, I would recommend
> that you do much more extensive research before further pontification
> in this investment arena where quality products are few and far between.

Comparing Green Energy ETFs

Alan,
LLTC is known for efficient power conversion. How much is EE? I have no idea.


On Oct 14 04:33 AM Alan Young wrote:

> I'm scratching my head in confusion. I looked at the two biggest
> holdings in QCLN (LLTC 8.8% and ONNN 7.4% ). They are both big semiconductor
> manufacturers that serve a broad range of industries: telecom, home
> electronics, automobiles, and even military applications. Where's
> the "clean" in that? How much of their business is actually related
> to energy efficiency? JCI would make more sense.

10 Green Energy Gambles: A Q3 Update

tc1-
I did my playing with RZ at $2, which was now clearly too soon. I agree it could turn around, but even at $1.50, I'm very happy to have gotten out at $1.78.

I think your information about CPTC is very interesting, and I'll have to give this stock another look. I first became interested in the company in 2007 when researching transmission stocks, and I would alway have preferred if they had been a pure-play transmission company. The fact that they finally are makes them much more interesting.

Dyadic: A Stock to Avoid

Barrel-
Being a writer, I'm used to this sort of PR spam. I've received this same sort of stuff from good companies as well as bad. But I don't encourage it, and certainly don't think it's a good sign.


Tom S-
If you go to a used car lot, and see a car you'd be embarrassed to be seen driving, do you waste your time by taking it on a test drive just to find out if the brakes work and the engine is in good shape?

For me, Dyadic is just such a car. Sorry to hear you're still driving such a clunker, even though you have far more evidence than I that it's long past time to trade it in.