Tag Archives: Wind Power

Energy Portfolios: 22 Months: Sustainable Energy Up But Dropping

The Dow Jones Industrial Average is up 26.9%
The S&P 500 is up 35.75%
The Fossil Fuel Portfolio continues to dramatically underperform the reference indices. It is up 1.01%.
The Sustainable Energy portfolio is up 106.88% from Dec. 21, 2012 but down from August, 2014.
I was invited to write for “Seeking Alpha.” Some of the data herein was posted as “The Paradigm Is Shifting; Fossil Fuels Are Becoming Fossils” on Seeking Alpha on October 1, 2014. Additional analysis on Cree was posted on Seeking Alpha on 10/7/14, as “Cree: Strong Financials, But … “

By 10/15/14, GT Advanced Tech had filed for bankruptcy protection, and other stocks in the portfolio dropped to points near their Dec. 2012. The portfolio as a whole dropped 55% from Sept. 19, 2014. Stay tuned, and keep your seat belt on. Continue reading →

Energy Portfolios: 20 Months: Conclusions & Observations

Conclusions:

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.
Investing in an index fund may have been more lucrative – and less stressful – than investing in the Fossil Fuel portfolio.
Investing in paradigm shifting technology, i.e., First Solar, Sunpower, GT Advanced Technology and Vestas may be very lucrative.
A diversified portfolio in paradigm shifting technology may also be effective. The “home runs” will more than make up for the “strike-outs.”
Investing in a well-run, or well-connected, company, i.e., Haliburton, in a declining industry may also be lucrative.

Observations:

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.
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.
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.

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Energy Portfolios, 20 Months: Sustainable Energy up 229%, Fossil Fuel up 18.4%

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.
The S&P 500 is up 39.3% from 12/21/12.
The Fossil Fuel Portfolio continues to dramatically underperform the reference indices. It is up 18.36% from Dec. 21, 2012 and down 5.67% from July, 2014.
The Sustainable Energy portfolio is up 229.19% from Dec. 21, 2012.

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Energy Portfolios: 19 Months: Sustainable up 222%, Fossil Fuel up 25%

The Dow Jones Industrial Average is up 30.26%.
The S&P 500 is up 38.04%.
The Fossil Fuel Portfolio is continues to dramatically underperform the reference indices. It is up 25.08% from Dec. 21, 2012.
The Sustainable Energy portfolio is down 11% from last month, but is up 221.77% from Dec. 21, 2012.

The details are below.

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Energy Portfolios: 18 Months: Sustainable up 257.06%: Fossil Fuel up 24.56%

The Dow Jones Industrial Average is up 29.46% from 12/21/12.
The S&P 500 is up 37.27%.
The Fossil Fuel Portfolio is up 24.56% from Dec. 21, 2012.
The Sustainable Energy portfolio is up 257.06% from Dec. 21, 2012.

In addition to the data summary, below, this post, the 21st in the series, will be followed with a summary analysis.

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Energy Portfolios: 17 Months: Sustainable up 211.6%: Fossil Fuel up 18.52%

The Dow Jones Industrial Average is up 26.29% from 12/21/12.
The S&P 500 is up 32.03%.
The Fossil Fuel Portfolio is up 18.52% from Dec. 21, 2012.
The Sustainable Energy Portfolio is up 211.6% from Dec. 21, 2012. Continue reading →

Energy Portfolios, 16 Months: Sustainable Energy up 204.25%, Fossil Fuel up 15.38%

The Dow Jones Industrial Average is up 24.54% from Dec. 21, 2012.
The S&P 500 is up 30.56% from Dec. 21, 2012.
The Fossil Fuel Portfolio had a great month, however, it continues to dramatically underperform the reference indices. It is up 15.38% from Dec. 21, 2012.
The Sustainable Energy portfolio had a bad month, however, it continues to dramatically outperform the averages, and is up 204.25% from Dec. 21, 2012

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Energy Portfolios: 15 Months: Sustainable up 222.6%: Fossil Fuel up 7.3%

On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; Eight in the Sustainable Energy space and eight in the fossil fuel space. The Sustainable Energy portfolio is composed of Cree and Lighting Sciences in the LED space, GTAT, which at the time made solar ovens for cooking PV wafers, and today is diversifying, 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 Coal, and Haliburton and Transocean, companies in the offshore oil and oil and gas drilling service industries.

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Energy Portfolios: 14 Months: Sustainable up 184.4%: Fossil Fuel up 8.7%

The Dow Jones Industrial Average is up 23.01% from 12/21/12 to 2/21/14.
The S&P 500 is up 28.39%.
The Fossil Fuel Portfolio continues to dramatically underperform the reference indices. It is up 8.7% from Dec. 21, 2012.
The Sustainable Energy portfolio continues to dramatically outperform the averages, and is up 184.41% from Dec. 21, 2012.

Note that the Sustainable Energy portfolio does not include Solar City, SCTY, or Tesla Motors, TSLA. Solar City’s stock price is up 713.0%, from 10.73 on December 21, 2012 to 75.86 at the close of trading Feb. 21, 2014. Tesla is up 614.5% from 34 to 209.60.

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Energy Portfolios: 13 Months: Sustainable up 167.4%: Fossil Fuel up 8.92%

Figure 1, above, shows the relative performance of my hypothetical investments in sustainable Energy and Fossil Fuels, since Dec. 21., 2012.

The Dow Jones Industrial Average is up25.38% from 12/21/12.
The S&P 500 is up28.95%.
The Fossil Fuel Portfolio continues to dramatically underperform the reference indices. It is up 9.44% from Dec. 21, 2012, and down slightly from Dec. 20, 2013.
The Sustainable Energy portfolio continues to dramatically outperform the fossil fuel portfolio and the averages, and is up 167.37% from Dec. 21, 2012.

As described in the earlier posts in this series, in Dec., 2012, I read that MidAmerican Energy was buying large scale solar electric generating stations being built by First Solar and Sunpower, and being financed by GE. This got me thinking … Continue reading →

Energy Portfolios & Reference Indices, 2013 Summary

If a picture is worth a thousand words …

here are two thousand words on Sustainable Investing in 2013.

While the data may suggest that a “correction” may be in progress for the “Sustainable Energy” portfolio, and while the actions or inactions of various governments can dramatically effect performance of these portfolios, the Sustainable Energy Portfolio outperformed the Dow Jones Industrials and the S&P 500, both of which outperformed the Fossil Fuel Portfolio.

As the professional say, “Past performance is no guarantee of future performance.”

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Energy Portfolios At One Year: Sustainable Energy up 140%, Fossil Fuel up 9.85%

On Dec. 21, 2011, reading that MidAmerican Energy was investing in utility scale solar energy generation, I looked at First Solar and Sunpower. Then I looked at six other companies in the sustainable energy world. I created a model portfolio. To make things interesting, I looked at eight companies in the fossil fuel industy and invested $16 Imaginary Million in these 16 companies, $1.0 Imaginary Million in each. As of the close of trading one year later, Friday, Dec. 20, 2013,

The Dow Jones Industrial Average is up 23.91% from 12/21/12.
The S&P 500 is up 27.13%.
The Fossil Fuel Portfolio continues to dramatically underperform the reference indices. It is up 9.85% from Dec. 21, 2012.
The Sustainable Energy portfolio continues to dramatically outperform the averages, and is up 140.31% from Dec. 21, 2012.

The data are summarized beginning in Table 1, below.

Continue reading →

Energy Portfolios: Minor Corrections, Overall Results In Line with the Trend

On Dec. 21, 2011, with $16 Imaginary Million, I created an investment simulation. I invested $1.0 Million in imaginary money in each of eight fossil fuel companies and eight sustainable energy companies. As of the close of trading 11 months later, Friday, Nov. 22, 2013, the trend, clearly evident after three months, in March of this year, continues.

The Dow Jones Industrial Average is up 22.72% from 12/21/12.
The S&P 500 is up 26.22%.
The Fossil Fuel Portfolio, dramatically underperforming the reference indices, is up 13.37% from Dec. 21, 2012.
The Sustainable Energy portfolio is up 145.37% from Dec. 21, 2012.
The Sustainable Energy Portfolio is also down 4.39% from October 18, 2013.

Note that this represents a retreat of 4.39% from the high of 156.14%, in October, 2013.

As discussed in September and October, last month, in Septermber, 2013, in “Investing for the Future,” and October, in “Sustainable Investing: Green Energy, Green Economy,” the important question is: Is this a trend or a bubble? As I wrote, I think it’s a trend.

The 2,000 pound question, after Typhoon Haiyon, Hurricanes Sandy, Irene and Katrina, after the fires of 2012 and 2013, the Missouri River Floods of 2011 – which knocked out the Fort Calhoun nuclear plant – the super-tornadoes of 2013 – one with a two mile wide contact point on land, which tore through Oklahoma (CNN / National Geographic / Zerohedge) is will we survive to make the transition to clean sustainable energy?

or rather:

“How many of us survive to make this transition?”
“What will be the carrying capacity of earth for humans?”

The data are summarized beginning in Table 1, below.

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Oyster Creek & Nuclear Power After Fukushima

Oyster Creek Nuclear Power Plant, Courtesy Exelon

A public hearing will take place October 28, 2013, at the Clarion Hotel, 815 Route 37 West, Toms River, NJ. The subject of the hearing will be the National Academy of Sciences, NAS, study on nuclear power plants and cancer and “Lessons Learned from Fukushima.”

As I see it, the most important lessons from Fukushima are:

Three of the Fukushima Dai’ichi nuclear reactors withstood the earthquake, the tsunami and the aftershocks. We can engineer systems that will withstand various scenarios, but this raises the cost such that nuclear cannot compete in a de-regulated energy market – see The Economist, here – and we cannot engineer against all possible events.
The radioactive plume reached across the Pacific to North America, just as the plume from Chernobyl reached across the Atlantic to North America. An accident anywhere, when it involves dispersion of toxic materials, is an accident everywhere,
We have seen four (4) meltdowns in the 54 years between the passage of the Price Anderson Act and the disasters at Chernobyl and Fukushima. The risk of a catastrophic accident such as a melt-down may be low, but a catastrophic accident, is by definition, catastrophic.
The losses from Fukushima are estimated in the Trillions of Dollars. The economic value of the electricity produced by the six nuclear reactors is probably less than $100 Billion. Generating electricity from nuclear power is like taking heroin for a headache: The cure is worse than the disease.

There is a fifth lesson to be learned; this from the NJ Clean Energy Program in New Jersey and Vestas, the wind company. As noted on the NJ Clean Energy Program – Project Activity Pages, we in New Jersey now have have 1,117.5 Megawatts (MW) of grid tied photovoltaic solar electric generating capacity, almost double the 636 MW of Oyster Creek. Vestas is offering 8 MW wind turbines.

WE HAVE WIND and SOLAR: WE DON’T NEED OYSTER CREEK OR OTHER NUCLEAR POWER PLANTS.

Offshore Wind Farm

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Sustainable Investing: Green Energy, Green Economy

On Dec. 21, 2012, with $16 Imaginary Million, I created an investment simulation. I invested $1.0 Million in imaginary money in each of eight fossil fuel companies and eight sustainable energy companies. As of the close of trading 10 months later, Friday, Oct. 18, 2013, the trend, clearly evident after three months, in March of this year, continues.

The Dow Jones Industrial Average is up 17.64% from 12/21/12.
The S&P 500 is up 22.03%.
The Fossil Fuel Portfolio, dramatically underperforming the reference indices, is up 7.47%.
The Popular Logistics Sustainable Energy portfolio is up 156.14%.

As discussed last month, in “Investing for the Future,” the important question is: Is this a trend or a bubble? As I wrote, I think it’s a trend.

Jeremy Grantham, the “G” in GMO, invests with the expectation that all things being equal, a company’s valuation tends toward their arithmetic mean values. (Note that Mr. Grantham has not been contacted for this study.) But note that disruptive technologies are, by definition, game changers. Disruptive tech alters the landscape. If you looked at the airline, automobile and railroad industries over the 20th Century, automobiles and airlines waxed while railroads waned.

The future may be similar for Fossil Fuels and Sustainable Energy. The Market Capitalization of the Fossil Fuel portfolio is $1.13 Trillion. The Market Capitalization of the Sustainable Energy Portfolio is $0.06 Trillion ($60 Billion). The value of the companies of the Sustainable Energy portfolio is roughly 5.3% of the market capitalization of the companies of the Fossil Fuel portfolio. It can almost be described as a rounding error compared to the value of the Fossil Fuel portfolio. But if Mr. Grantham’s analysis is valid, and you aggregate the portfolios into one called “Energy” as opposed to a “Fossil Fuel” portfolio and a “Sustainable Energy” portfolio, then the shareholders of these various companies are in for an interesting few years.

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