Category Archives: Stock Market

Energy Portfolios, 4 Years, 11 Months: Sustainable Energy Up 108.6%, Fossil Fuel DOWN 24.3%

On Dec. 21, 2012, I put $16 Million imaginary dollars into 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space, $1.0 Million into each. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,

In recent months the Sustainable Energy portfolio has dropped and the Fossil Fuel portfolio has increased. However, this may prove to be a short term correction that has more to do with macro-geopolitical events emanating from Washington, DC than global macroeconomic factors.    

As of the close of trading 59 months later,

  • The Market Capitalization of the sustainable energy companies is up 148.6%, from $39.58 Billion to $98.4 Billion. (See Table 6, below).
  • The Market Capitalization of the Fossil Fuel portfolio is DOWN 3.8%, from $1.09 Trillion to $1.05 Trillion. (See Table 7, below).
  • And the Market Capitalization of the Big Oil companies is DOWN 2.6%,from $1.03 Trillion on 9/21/17 to $1.007 Trillion on 10/20/17. (See Table 8, below)

In Addition

  • The Fossil Fuel portfolio went from $8.0 Million to $6.06 Million, down 24.3% overall, down 4.94% on an annualized basis.
  • The Sustainable Energy portfolio went from $8 Million to $16.7 Million, up 108.6%, overall and 22.1% on an annualized basis.
  • The Dow Jones Industrial Average is up 80.2% overall and 16.31% on an annualized basis; from 13,091 on 12/21/12 to 23,591 on 11/21/17.
  • The S&P 500 is up 81.8% overall and 16.63% on an annualized basis, from 1,430 on 12/21/12 to close at 2,599 on 11/21/17.

The details are below.

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Apple: Worms Eating the Core or Golden?

Apple Logo

Apple stock closed on October 9, 2012 at $635. While up $247, or 64%,  for the year, the stock price has dropped 70 points, 10%, from the peak of $705 reached on Sept. 21, 2012. Where will it go next?  What caused this 10% drop? And what about Amazon, Google, Microsoft, & Research in Motion?

Here’s what I think:

  1. Apple (AAPL) will announce earnings on October 25, 2012. I expect $46.79 to $48.9 per share on an annualized basis, up 10 to 15% from the current $42.54 per share.
  2. Apple’s share price will increase back to $700, and then to $750 by year-end, 2012.
  3. Amazon (AMZN), Google (GOOG) and Microsoft (MSFT) will be stable thru to year-end, 2012.
  4. Research In Motion (RIMM) will be acquired by June 2013.

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The World Will Not End & Other Predictions for 2012

space-apple-logo

 

Here are my top 10 predictions for 2012. These are less readings of the tea leaves or the entrails of goats and chickens and more simple extrapolations of patterns in progress. Altho that may be the way effective oracles. They just masked their observations with hocus pocus, mumbo-jumbo, and guts.

This list runs a gamut from business and technology to energy, instability in the Middle East, micro-economics in the United States, politics, and not-yet-pop culture.

  1.  Apple and IBM will continue to thrive. Microsoft will grow, slightly. Dell and HP will thrash. A share of Apple, which sold for $11 in December, 2001, and $380 in Dec. 2011, will sell for $480 in Dec. 2012.
  2. The Price of oil will be at $150 to $170 per barrel in Dec., 2012. The price of gasoline will hit $6.00 per gallon in NYC and California.
  3. There will be another two or three tragic accidents in China. 20,000 people will die.
  4. There will be a disaster at a nuclear power plant in India, Pakistan, Russia, China, or North Korea.
  5. Wal-Mart will stop growing. Credit Unions, insurance co-ops and Food co-ops, however, will grow 10% to 25%.
  6. The amount of wind and solar energy deployed in the United States will continue to dramatically increase.
  7. The government of Bashar Al Assad will fall.
  8. Foreclosures will continue in the United States.
  9. Arizona Sheriff Joe Arpaio will resign. Calls for Clarence Thomas to recuse himself from matters involving his wife’s clients will become louder, but Justice Thomas will ignore them. A prominent politician who says “Marriage is between a man and a woman,” or her husband, will be “outed” as gay. President Obama will be re-elected.
  10. The authors of Vapor Trails will not win a Nobel Prize for literature. They will not win a “MacArthur Genius Award.” Nor will I despite my work on this blog or “Sunbathing in Siberia” and the XBColdFingers project.

Here are the details … Continue reading →

Jeremy Grantham at Marlboro College – on Investing for Sustainability

Jeremy GranthamJeremy Grantham, the founder of GMO LLC, a hedge fund with $93 Billion under management, will speak Friday, 12/2/2011, at 5:00 PM at the Marlboro College Grad School, 28 Vernon Street, Brattleboro, Vermont.

Grantham has written “Everything you need to know about global warming in 5 minutes,” which can be found at Think Progress and The Big Picture.”

He says “In the last 200 years we have increased the level of carbon dioxide in the atmosphere by about 40%.”

(Ed. note: We have pumped about 1.0 trillion tons of Carbon Dioxide into the atmosphere. This has increased the atmosphere’s capacity to absorb heat and water.)

It is prudent and conservative to ask “What will happen next?”

Grantham continues:

What is the cost of lowering CO2 output and having the long-term effect of increasing CO2 turn out to be nominal?  The cost appears to be equal to foregoing, once in your life, six months’ to one year’s global growth – 2% to 4% or less.  The benefits, even with no warming, include: energy independence from the Middle East; more jobs, since wind and solar power and increased efficiency are more labor-intensive than another coal fired power plant; less pollution of streams and air; and an early leadership role for the U.S. in industries that will inevitably become important.

Conversely, what are the costs of not acting on prevention when the results turn out to be serious:  costs that may dwarf those for prevention; and probable political destabilization from droughts, famine, mass migrations, and even war.  And … what might be the cost at the very extreme end of the distribution: Definitely life changing, possibly life threatening.”

It would be interesting to hear Mr. Grantham’s views on Cape Wind, Solar Energy, Marine Hydro, the Obama – Buffett idea to tax wealthy people, and the Popular Logistics plan for 100% Clean, Renewable Energy (here). However, I suspect I know what he might say:

How would you pay for it?

Granted that if we factored the environmental costs of carbon dioxide, arsenic, lead, mercury, radioactive wastes, zinc, etc. coal, oil, methane, and nuclear would be much more expensive than they are believed to be today. But we don’t factor in those costs….

In New Jersey between 2001 and 2010, e went from a total of six systems with a combined capacity of 9.0 KW to about 7000 systems with a combined capacity of 211,000 KW or 211 MW, and I expect another 3000 systems and about 200 additional MW in 2011. This is exponential growth, leading to the following questions:

  • Does ‘Moore’s Law’ apply to Solar?
  • Is this a Bubble?
  • Or Is it a Paradigm – Shift?

Tipping Point for Gas?

Peter Gosselin, writing in the Business Section of LA Times, Saturday, May 24, 2008, writes that Ford, GM, and Chrysler are in serious trouble because of the price of gasoline. He quotes Robert DiClemente, chief U. S. economist at Citigroup in New York “The economic outlook has been taken hostage by the relentless surge in oil prices.” Gosselin adds that Ford Motor Co announced Thursday, May 22, 2004, that it was abandoning any hope of making a profit this year or next now that sales of its gas-guzzling pickup trucks and Explorers have plunged.

Gosselin and Bill Vlasic, writing in the(Click here) (or here for New York Times home)quote Ford CEO Alan Mulally saying the auto industry has “reached a tipping point” where energy costs were fundamentally changing what kind of vehicles Americans buy.

While Gosselin and Vlasic write that Ford, GM, and Chrysler are in trouble, Toyota and Matsushita Electric are investing US $192 Million / 20 Billion yen to build plants to manufacture batteries for hybrids (Click Here).

You can see this by looking at the stock value of these companies. An investment of $2,000 in Ford and General Motors, on Dec. 24, 1999 would be worth Toyota and Honda would be worth about $540 today, not counting the value of any dividends paid, as both Ford and GM lost 73% of their value. On the other hand, An investment of $2,000 in Toyota and Honda stock on Dec 24, 1999 would be worth about $2,860, not counting any dividend payouts because Toyota increased 11.36% and Honda increased 72.53%. These data can be found on the Google financial pages, (click here).

Date Investment 12/2000 5/2008 % Change
Toyota $1,000.00 $1,113.60 11.36%
Honda $1,000.00 $1,725.30 72.23%
Ford $1,000.00 $274.10 -72.59%
GM $1,000.00 $273.20 -72.68%
       
Toyota & Honda $2,000.00 $2,838.90 41.95%
Ford & GM $2,000.00 $547.30 -72.64%

Mr. Gosselin can be reached at Peter.Gosselin (at) latimes.com

(Please Note that I am not licensed to sell investment advice. This should not be construed as such.  It is just an interesting observation. Note also that I have no investment in any of these securities. I do own a ’99 Chevy Malibu and a ’99 Mercury Sable. My next car will get 45 mpg, which means it will probably be a Prius.)