Author Archives: L J Furman, MBA

About L J Furman, MBA

Analyst here and Director of Information Technology with an MBA in Managing for Sustainability.

Energy Portfolios, 3 Years: Sustainable Energy Up 166.6%, Fossil Fuel DOWN 36.23%

PLPort.1512On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space.

As of the close of trading on December 21, 2015:

  • The Fossil Fuel portfolio was worth $5.1 Million, down 36.23% overall, down 12.08% on an annualized basis.
  • The Sustainable Energy portfolio was worth $21.33 Million, up 166.6%, overall and 55.53% on an annualized basis.
  • The Dow Jones Industrial Average is up 31.8% overall and 10.6% on an annualized basis, from 13,091 on 12/21/12 to close at 17,252 on 10/21/15.
  • The S&P 500 is up 41.33% overall and 13.78% on an annualized basis, from 1,430 on 12/21/12 to close at 2,021 on 10/21/15.
  • If there’s a war on coal, it’s part of the war on fossil fuel – and fossil fuel is losing.

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COP 21 – the Future Began Yesterday

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Earth, The Blue Marble, courtesy NASA

COP 21 is, perhaps, the most important international effort in history. It concluded with an agreement by 196 nations to limit CO2 emissions to hold global temperature rise to 1.5 degrees Centigrade or 3.3 degrees Fahrenheit (NPR).

The only way to do this is to phase out fossil fuels, quickly, and replace them with efficient use of sustainable energy systems, i.e., solar, wind, geothermal, hydro, and insulation.

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12,209 Americans Killed by Americans with Guns in 2015

 

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December 2, 2015, 19 Americans were killed and 21 wounded in four incidents, one dead, three wounded in Georgia (Atlanta Journal Constitution), two dead in Texas in two incidents (ABC News) and 14 killed and 17 wounded in San Bernardino, California (NPR). In addition, two of the alleged shooters in California were killed and a police officer was wounded in a subsequent shoot-out with police.

As President Obama said, “We have a pattern now of mass shootings in this country that has no parallel anywhere else in the world.”  (NY Daily News, ABC News, CBS News.)

A total of 12,209 Americans were shot to death in 350 incidents in the USA thus far in 2015, according to Gun Violence Archive. In 2014 the US population was 318.9 million. So the odds are 0.0038285% – 38.285 in a Million or 1 in 26 thousand (26,119.9) that YOU – or I – will be shot to death in America. That’s better that the one in 175 million chance of winning the Powerball Lottery (Ronald Wasserstein, Huffington Post, here).

Americans are 6,700 times more likely of being shot dead than winning Powerball.

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Energy Portfolios, 2 Years 11 Months: Sustainable Energy Up 129.5%, Fossil Fuel DOWN 29.6%

PLPort.1511On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,

As of the close of trading on November 20, 2015:

  • The Fossil Fuel portfolio was worth $5.63 Million, down 29.57% overall, down 10.44% on an annualized basis.
  • The Sustainable Energy portfolio was worth $18.0 Million, up 129.50%, overall and 45.71% on an annualized basis.
  • The Dow Jones Industrial Average is up 36.15% overall and 10.44% on an annualized basis, from 13,091 on 12/21/12 to close at 17,824 on 10/21/15.
  • The S&P 500 is up 46.10% overall and 16.27% on an annualized basis, from 1,430 on 12/21/12 to close at 2,089 on 10/21/15.

It’s not a war on coal. It’s a paradigm shift.Think about it. We don’t use whale oil or kerosene for street lamps. We did, 100 years ago.

This of course, has geopolitical ramifications. It’s not just carbon dioxide, which is changing the climate and acidifying the oceans. Like Al Queda, Hamas and Hezbollah, ISIS finances its operations with petrodollars. (The difference is that Hamas is supported by Emirates and Kuwait, Hezbollah by Iran, Al Queda by our friends the Saudis, while ISIS has its own oil wells.) Earlier this year NJ’s Honorable Governor Chris Christie, a candidate for President, gave Exxon a $9 Billion gift (which is being challenged in the courts). BP was the beneficiary of the 1953 coup by the US under President Eisenhower and the UK which toppled the democratically elected government led by Prime Minister Mohammed Mossagedgh of Iran and propped up the Shah until the revolution in 1979.  Shell has spent something like $12 Billion in failed attempts to drill the Arctic. BP, Transocean and Halliburton brought us the Deepwater Horizon; Halliburton also profited from the US Led war in Iraq.

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Energy Portfolios, 2 Years 10 Months: Sustainable Energy Up 125%, Fossil Fuel DOWN 27%

PLPort.1510On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space.

As of the close of trading on October 21, 2015:

  • The Fossil Fuel portfolio was worth $5.82 Million, down 27.3% overall, down 9.64% on an annualized basis.
  • The Sustainable Energy portfolio was worth $18.0 Million, up 125.0%, overall and 44.13% on an annualized basis.
  • The Dow Jones Industrial Average is up 31.15% overall and 10.99% on an annualized basis, from 13,091 on 12/21/12 to close at 17,169 on 10/21/15.
  • The S&P 500 is up 41.19% overall and 14.54% on an annualized basis, from 1,430 on 12/21/12 to close at 2,019 on 10/21/15.

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Using EMV to Secure Social Security

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Identity thieves want Social Security numbers matched with names, addresses and birthdays.

And they have them. By the Millions!

On 90 Million Americans! Possibly 200 Million!

They used Experian to get information on 15 million T-Mobile customers – and threaten everyone in Experian’s databases. They stole information on 90 million people whos health insurance is provided by Anthem Blue Cross or Excellus Blue Cross.  And 22 Million current and former employees of the U. S. government, by hacking Office of Personnel Management (OPM). Plus 58 million customers of Home Depot and 70 million customers of Target.   The problem is growing. They are also targeting parking services such as Book 2 Park, Park N Fly, and One Stop Parking.

The sets intersect – it is likely many Home Depot customers also shop Target, work for the government and or have health insurance from Blue Cross Blue Shield.  But it’s also likely that very few of the 10 million customers of Excellus Blue Cross are also customers of Anthem Blue Cross so we are looking at a problem for at least 90 Million Americans, 28% of the country. That’s almost one out of three. And 200 million? That’s 2 out of 3.

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Energy Portfolios, 2 Years 9 Months: Sustainable Energy Up 111.3%, Fossil Fuel DOWN 33.5%

PL_Port.1509On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,

As of the close of trading on Sept. 21, 2015:

  • The Fossil Fuel portfolio was worth $5.32 Million, down 12.55% on an annualized basis.
  • The Sustainable Energy portfolio was worth $16.9 Million, up 41.74% annualized.
  • The Dow Jones Industrial Average is up 9.65% on an annualized basis, from 13,091 to 16,512 on 9/21/15.
  • The S&P 500 is up 14.3% on an annualized basis from 1,430 to close at 1,969.

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China has a Great Wall. But there is no Wall Street.

Fake_Bull

When stocks on the Shanghai Securities Exchange, the SSE, “corrected” on August 24, 2015, stocks in US and other markets followed. But nothing has fundamentally changed. None of the “Fundamentals” on any publicly traded U.S. or European companies have significantly changed (other than the Market Capitalization and Price Earnings ratios, which are, of course, functions of the stock price). Earnings per Share, EPS, the existence or lack thereof of what Warren Buffett calls a “moat,” debt to asset ratios, return on income, other financial ratios, were and remain unaffected by day to day fluctuations of stock price.

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Charging Bull, by Arturo Di Monica

Stocks that were fundamentally bad investments on Friday, August 21, 2015 were likely to have been bad investments on Tuesday. August 25, 2015. Stocks that were good investments on Friday, August 21, 2015, were fundamentally somewhat better investments on Tuesday. August 25, 2015.

Dancer on the Markets

Dancing on the Charging Bull

The SSE Composite is not the S&P 500, or even the Dow. While there are frequent scandals involving insider trading and other financial improprieties, they are the exception and there are regulations designed to keep them that way. China, on the other hand …

The Shanghai Stock Exchange Composite index, the SSE Composite, looks kind of like the S&P 500. However, there are key differences between the indices.

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Popular Logistics Energy Portfolios and “The Correction”

PL_Port.1508bAccording to Adam Haigh, Bloomberg Business the current stock market valuation “Correction” may be complete. Meanwhile, in the microeconomic world of energy, as illustrated above, the Sustainable Energy portfolio” I created in December, 2012, here, rose slightly above the close of trading Friday, August 21, 2015, while the Fossil Fuel portfolio, the S&P 500 index and the Dow Jones Industrial average closed below their values at the close of trading on 21 August, 2015.

Mr. Haigh, in  Asian Stocks Rise as U.S. Equity Rout Halted; China Futures Gain, wrote,

Asian stocks rose for a second day after U.S. shares halted a six-day rout.

The MSCI Asia Pacific Index gained 0.9 percent to 127.93 as of 9:05 a.m. in Tokyo. The Standard & Poor’s 500 Index jumped 3.9 percent, the most since 2011. Two things that have supported U.S. stocks in the past, dovish words from the Federal Reserve and improved economic data, halted a plunge that erased $2.2 trillion from equity values.

But the long term trend in energy stocks, first reported by me here in February, 2013, appears to be persistent. Solar and Wind stocks may be continuing to climb; Fossil fuel stocks may be continuing to decline. Either or both of these trends could, of course, reverse.

The data are summarized beginning in Table 1, below. Continue reading →

Energy Portfolios, 2 years 8 months Sustainable Energy Up 103%, Fossil Fuel DOWN 34%

PLPort.1508On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 Million in the Sustainable Energy space and $8.0 Million in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,

  • The Fossil Fuel portfolio is now worth $5.26 Million, down 34.28% overall, 12.85% on an annualized basis.
  • The Sustainable Energy portfolio is now worth $16.2 Million, up 102.6%, 38.48% on an annualized basis.
  • The Dow Jones Industrial Average is up 25.74%, 9.65% on an annualized basis, from 13,091 on 12/21/12 to close at 16,460 on 8/21/15.
  • The S&P 500 is up 37.8%, from 1,430 to close at 1,971 on 8/21/15.
  • The Fossil Fuel and Sustainable Energy portfolios, like the indices, are down in the last month.

The conclusion, that investors are moving away from Fossil Fuels and into Sustainable Energy, seems logical, if not obvious.

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On New Jersey’s Energy Master Plan

On August 17, 2015, I attended the Board of Public Utilities, BPU, hearings regarding New Jersey’s Energy Master Plan, EMP.

The beach and cyclone at Seaside Heights, NJ, before and after Hurricane Sandy, Oct. 2014

The beach and cyclone at Seaside Heights, NJ, before and after Hurricane Sandy, Oct. 2014

A lot of people, myself included, spoke about Sandy. (Photos, click here).

Many spoke of the need for the BPU to act independently of the Governor and think long term.

No one spoke about a need or want for more fossil fuels or more nuclear.

The lobbyist from the NJ GCA, The Gasoline, C-Store, Automotive Association told the commissioners how happy he was that he installed a solar energy system on his home and said that gas stations need robust electricity. They can’t simply install emergency generators that burn diesel or gasoline.

Image of the Lillgrund, Sweden wind farm, courtesy of Siemens

Lillgrund, Sweden, courtesy Siemens

I called for: 140% clean, renewable, sustainable electricity by 2030:

  • Solar: 3.5 GW
  • Wind: 3.5 GW
  • Batteries: 1.5 GW
  • Biofuel: 1.5 GW

Including:

  • 250 MW of solar in a 100 KW array on each of the 2500 public schools,
  • 125 MW of battery backups, in a 50 KW Tesla Powerwall or equivalent system on each public school,
  • These would give us emergency shelters, with power, in every community in New Jersey.
  • A Capstone microturbine, or the equivalent at each sewage treatment plant.

These, I explained, would make the grid more resilient.

I also added that Wall Street appears to be abandoning fossil fuels. This observation is based on the data collected from Dec. 12, 2012, and published on Popular Logistics, here, that show that for the period from Dec. 21, 2012 to July 21, 2015,

  • Sustainable Energy: Up 121%, 46.7% per year.
  • Fossil Fuel: DOWN 25% overall, -9.26% per year,
  • S&P 500: Up 47.54%, 18.41% per year.

The full text of my prepared remarks is below:

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Energy Portfolios, 2 years 7 months Sustainable Energy Up 121%, Fossil Fuel DOWN 24%

PLPort.1507On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space.

  • The Fossil Fuel portfolio is now worth $6.09 Million, down 23.93%.
  • The Sustainable Energy portfolio is now worth $17.64 Million, up 120.54%.
  • Both Fossil Fuel and Sustainable Energy are down slightly in the last month.
  • The Dow Jones Industrial Average is up 37.6%, from 13,091 on 12/21/12 to close at 18,016 on 7/21/15.
  • The S&P 500 is up 47.6%, from 1,430 to close at 2,110 on 7/21/15.

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Greece, Antiquities and a Far Out Way Out

Elgin Marbles in the British Museum

The National Debt of Greece, according to National Debt Clocks . Org, here, as of Thursday, July 10, 2015, 10:45 PM EST, was $380 Billion USD and 345 Billion Euros.

A lot of money, but only $32k EU per person, only slightly higher than the typical American college student’s debt. (US News reported, here, “69 percent [of 2013 graduates] left school with an average of $28,400 in student loan debt.”)

But back to Greece …

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Deepwater Horizon may cost BP $53.8 Billion – 43.1% of it’s current value

Image of the fire from the oil spill

Deepwater Horizon Spill in 2010. Photo: Gerald Herbert, AP.

11 Crew were lost in the explosion and fire on the Deepwater Horizon rig on April 20, 2010. In addition, roughly 5.2 million barrels of oil poured into the Gulf of Mexico during the 87 days between April 20, 2010 when the explosion occurred and July 15, 2010 when the well was capped.

BP, found guilty of “Gross Negligence” and “Willful Misconduct” in the Deepwater Horizon oil spill, (BBC, EcoWatch), has agreed to pay $18.7 Billion over the next 15 years (BP Press Release, Reuters) to settle various claims with the United States, the states of Florida, Alabama, Mississippi, Louisiana and Texas, and others.  This amounts to 14.8% of BP’s current market capitalization.

Pursuant to the agreements, BP will pay $1.1 Billion per year over the next 15 years. While the $18.7 Billion amounts to 14.8% of BP’s current market capitalization of $125.59 Billion, the $1.1 Billion per year is only a loss of 0.88% of BP’s current market capitalization each year.

However,

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Energy Portfolios, 2 1/2 years Sustainable Energy Up 128%, Fossil Fuel DOWN 18.2%

PLPort.2015.6.21On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,

  • The Fossil Fuel portfolio is now worth $6.54 Million, down 18.24%.
  • The Sustainable Energy portfolio is now worth $18.259 Million, up 128.24%.
  • The Dow Jones Industrial Average is up 37.6%, from 13,091 on 12/21/12 to 18,061 on 6/20/15.
  • The S&P 500 is up 47.55%, from 1,430 to 2,110.
  • The Energy Portfolios and the Indices are down in the last month.

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