Energy Portfolios: 20 Months: Conclusions & Observations

by L J Furman, MBA on August 29, 2014

in Carbon, Coal, Connecting the Dots, Energy, Sustainable

PL_Port_1408Conclusions:

  1. The performance of most of the companies in these portfolios supports the hypothesis that a paradigm shift away from fossil fuels and toward renewable energy systems is underway.
  2. Investing in an index fund may have been more lucrative – and less stressful – than investing in the Fossil Fuel portfolio.
  3. Investing in paradigm shifting technology, i.e., First Solar, Sunpower, GT Advanced Technology and Vestas may be very lucrative.
  4. A diversified portfolio in paradigm shifting technology may also be effective. The “home runs” will more than make up for the “strike-outs.”
  5. Investing in a well-run, or well-connected, company, i.e., Haliburton, in a declining industry may also be lucrative.

Observations:

  1. The long term trend appears to be that investments in Sustainable Energy are likely to pay off in the long term and also, probably, the short term.
  2. Investments in Fossil Fuels, however do not appear likely to appreciate in the near future, even in a “Bull Market,” such as we appear to be in.  However, a speculator, i.e., a gambler, may be able to play various fossil fuel stocks, buying at lows and selling at highs. While I am not an investment professional, I personally, don’t know if this is worth the risk. I prefer to do my gambling in Atlantic City, New Jersey and Las Vegas, Nevada.
  3. When considered against the backdrop of global geopolitics, i.e., Russia, which exports oil and methane, invading Ukraine, ISIS in Iraq and Syria threatening to take over Iraqi oil operations, other turmoil in the Middle East, a paradigm shift away from fossil fuels seems likely to insulate energy flows from remote geopolitical events and strengthen economies that have executed this paradigm shift. Therefore, investments supporting such a paradigm shift may do well, while investments supporting the existing paradigm may not.

Background:

On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 iMil in the Sustainable Energy space and $8.0 iMil in the fossil fuel space.

  • The Dow Jones Industrial Average is up 30.16 % from 12/21/12 through8/21/14.
  • The S&P 500 is up 39.3% from 12/21/12 through 8/21/14.
  • The Fossil Fuel Portfolio continues to dramatically underperform the reference indices. It is up 18.36% from Dec. 21, 2012 through 8/21/14 and down 5.67% from 7/21/14.
  • The Sustainable Energy portfolio is up 229.19% from Dec. 21, 2012 through August 21, 2014.

The Sustainable Energy portfolio is composed of Cree and Lighting Sciences in the LED space, GT Advanced Technologies, First Solar and Sunpower in the solar space, Vestas, a wind company, Solazyme a biofuel company and Next Era, a utility. The fossil fuel companies are the oil companies BP, Chevron Texaco, Conoco Phillips, Exxon Mobil and RD Shell, the coal company Peabody Energy, and Haliburton and Transocean Ltd, companies in the offshore oil and oil and gas drilling service industries. The Sustainable Energy portfolio does not include Tesla and Solar City.

Coming Soon – Detailed Observations on the Sustainable Energy and  the Fossil Fuel portfolios.

Posts in this series

  1. L. Furman, 12/21/12, Popular Logistics Sustainable Energy Portfolio,
  2. L. Furman, 2/8/13, Nega-Watts, Nega-Fuel-Watts, Mega-Bucks,
  3. L. Furman, 2/9/13, Gold Bricks and Sink-Holes – The Risk & Reward of Fossil Fuel, Solar & Wind,
  4. L. Furman, 3/2/13, Sustainable Energy Portfolio UP 16% & Fossil Fuel Portfolio Up 1.7% – Since Dec.21, 2012..
  5. L. Furman, 3/23/13, Portfolio Simulation At 3 Months: Sustainable Energy: Up 22%. Fossil Fuels: 3%.
  6. L. Furman, 4/26/13, Earth Day, 2013. Oil Spills, Explosions, Fracking Business As Usual & The Stock Market Response
  7. L. Furman, 5/13/13, Popular Logistics Energy Portfolios: The Trend Continues.
  8. L. Furman, 6/24/13, Popular Logistics Energy Portfolios: At 6 months
  9. L. Furman, 7/22/13, Popular Logistics Energy Portfolios: Sustainable Energy Doubles. Fossil Fuels increase 5.4%
  10. L. Furman, 8/22/13, Popular Logistics Energy Portfolios: An Exercise in Climate Capitalism
  11. L. Furman, 9/20/13, Energy Portfolios – Investing for the Future
  12. L. Furman, 10/21/13, Sustainable Investing – Green Energy, Green Economy
  13. L. Furman, 11/22/13, Energy Portfolios: Minor Corrections, Overall Results In Line With the Trend
  14. L. Furman, 12/23/13, Energy Portfolios at One Year Sustainable Energy up 140%. Fossil Fuels up 9.85%.
  15. L. Furman, 12/26/13, Energy Portfolios and Reference Indices, 2013 Summary.
  16. L. Furman, 1/22/14, Energy Portfolios: 13 Months, Sustainable Energy up 167.4%, Fossil Fuels up 9.44%.
  17. L. Furman, 2/24/14, Energy Portfolios: 14 Months: Sustainable Energy up 184.4%, Fossil Fuels up 8.7%
  18. L. Furman, 3/23/14, Energy Portfolios: 15 Months: Sustainable Energy up 222.6, Fossil Fuel up 7.3%
  19. L. Furman, 4/22/14, Energy Portfolios, 16 Months: Sustainable Energy up 204.25%, Fossil Fuel up 15.38%
  20. L. Furman, 5/21/14, Energy Portfolios, 17 Months: Sustainable Energy up 211.6%, Fossil Fuels up 18.5%
  21. L. Furman, 6/24/14, Energy Portfolios, 18 Months: Sustainable Energy up 257%, Fossil Fuels up 24.6%
  22. L. Furman, 6/26/14, Energy Portfolios: 18 Months, Analysis
  23. L. Furman, 7/22/14, Energy Portfolios: 19 Months: Sustainable Energy up 222%, Fossil Fuels up 25%
  24. L. Furman, 8/23/14, Energy Portfolios: 20 Months: Sustainable Energy up 229%, Fossil Fuels up 18.4%
  25. L. Furman, 8/ /14, Energy Portfolios: 20 Months: Conclusion & Observations

I, Larry Furman, am an analyst with Popular Logistics. I hold a BS and an MBA. I am available for consulting in various domains and can be reached at “LFurman . MBA” at G Mail.  My goal in these posts is to present and discuss phenomena which I find interesting and which appear indicative of systemic shifts in the economy. Investments in equities of various companies are risky.  I do NOT hold a “Series 6″ or “Series 7″ license from the SEC or any similar licensing body. I am NOT a licensed stock broker, investment adviser or financial adviser and this should n0t be considered “Financial Advice” or “Investment Advice.”

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