{"id":116470,"date":"2017-11-14T10:15:01","date_gmt":"2017-11-14T15:15:01","guid":{"rendered":"http:\/\/countingpips.com\/?p=116470"},"modified":"2018-06-01T15:49:14","modified_gmt":"2018-06-01T15:49:14","slug":"green-energy-lost-cause-or-must-have-investment","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/11\/green-energy-lost-cause-or-must-have-investment\/","title":{"rendered":"Green Energy: Lost Cause or Must-Have Investment?"},"content":{"rendered":"
November 14, 2017<\/div>
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By WallStreetDaily.com<\/u><\/a> \"Green<\/p>\n

\"LouisYou know I favor microcap technology investing.<\/p>\n

My rationale is simple (and irrefutable)\u2026<\/p>\n

No other investment on Earth rewards investors greater for hitting the bull\u2019s-eye.<\/p>\n

The problem is the bull\u2019s-eye always moves.<\/p>\n

Case in point: Roughly 10 years ago, the bull\u2019s-eye was squarely fixed on alternative energy.<\/p>

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With oil prices above $100 per barrel\u00a0, the rush toward \u201cgreen\u201d was fanatical.<\/p>\n

Ethanol underscores the lunacy, as it now ranks among the greatest booms and busts in history.<\/p>\n

Yet solar, wind, geothermal, biomass, hydroelectric and tidal power companies still exist. And some even thrive!<\/p>\n

So should we be nibbling on shares?<\/p>\n

Or is green energy a lost (investment) cause in a world of cheap gas?<\/p>\n

Here\u2019s what you need to know now\u2026<\/p>\n

This Is Impossible to Ignore<\/h2>\n

\"JonathanI know I\u2019m going to catch some heat for this, but climate change is real.<\/p>\n

The extent to which humans are responsible for rising temperatures is under debate. But temperatures are rising around the world.<\/p>\n

And the scientific evidence that links fossil-fuel burning to carbon emissions is vast and credible.<\/p>\n

With that said, the U.S. government has propped up the renewable energy (RE) industry through extremely generous subsidies.<\/p>\n

In fact, as of 2016, 59% of total federal energy tax preferences ($11 billion) went to RE, according to the Congressional Budget Office.<\/p>\n

The Trump administration is stocked with career oil and gas professionals, however. And they\u2019re working to eliminate RE subsidies.<\/p>\n

Operating costs are high for many RE companies like First Solar Inc. (NASDAQ: FSLR). And without federal financial intervention, these industries would likely collapse.<\/p>\n

In the short term, the pressure will likely keep a lid on renewable energy stocks. But in the long run, the best RE companies will not only survive but thrive.<\/p>\n

So if you\u2019ve got a strong stomach for volatility, buy now \u2014 and hold onto your hat.<\/p>\n

Shaping Our Energy Future<\/h2>\n

\"MartinAs Jonathan mentioned above, many of the subsidies that renewable energy companies receive are declining \u2014 and the investment money is drying up.<\/p>\n

Yet all that money has produced some genuine technological advances.<\/p>\n

CFL light bulbs, which the government forced us into, were a poisonous boondoggle that gave off a lurid light. But LED technology has galloped ahead and given us new energy-efficient light bulbs.<\/p>\n

Electric cars appear to be a real prospect through improved battery technology. (Though I wouldn\u2019t bet on Elon Musk\u2019s subsidy-devouring project.)<\/p>\n

We\u2019ve seen innovative power-generation technologies hit, too.<\/p>\n

While wind power turned out not to have much technological potential\u2026 and geothermal power causes earthquakes\u2026 solar power is another matter.<\/p>\n

With the continuing decline in costs and improved efficiency of solar cells, this now appears to be cost-effective in some areas \u2014 even without subsidies.<\/p>\n

Availability is an issue, however. The fact that it doesn\u2019t work on cloudy days is also a problem. But this can be solved by putting arrays in deserts toward the equator.<\/p>\n

Either way, based on cost and environmental benefits, solar power will clearly be a substantial part of our future.<\/p>\n

The Guggenheim Solar ETF (NYSE: TAN) is an excellent way to get a broad exposure to the solar power sector, including microcap players.<\/p>\n

While solar power underperformed in 2015\u201316, with several bankruptcies in the sector, it has done well in 2017. As a result, TAN is up 30% on the year.<\/p>\n

Even for the environmentally skeptical, TAN deserves a spot in your portfolio.<\/p>\n

Don\u2019t Fall Into This Trap<\/h2>\n

\"LouisGambling that companies will go green for green\u2019s sake is a losing bet.<\/p>\n

Sure, the Apples and Googles of the world love to tout their eco-friendly practices.<\/p>\n

But come on! Apple and Alphabet are sitting on $269 billion and $100 billion in cash, respectively. So they have all the excess profits in the world to spend on initiatives that don\u2019t necessarily deliver a return.<\/p>\n

For them, green for green\u2019s sake is good for public relations.<\/p>\n

For the majority of companies, though, there needs to be a more direct return on investment. Specifically, a return on their <\/em>core business.<\/p>\n

As investors, if we\u2019re going to wade into the alternative energy space, we need to focus on technologies that deliver a combination of benefits. That is, reducing harmful emissions and <\/em>cutting costs.<\/p>\n

After all, as Nobel Prize winner Milton Friedman observed in 1962 (emphasis mine), \u201cThere\u2019s one and only one social responsibility of business \u2014 to use its resources and engage in activities designed to increase its profits<\/strong>.\u201d<\/p>\n

The collective actions of companies throughout history underscore this reality. Unless green technology boosts profits, it won\u2019t enjoy mainstream adoption.<\/p>\n

Do such green technology unicorns exist? Absolutely!<\/p>\n

Take ClearSign Combustion (NASDAQ: CLIR), for example.<\/p>\n

It makes a green industrial burner that allows the world\u2019s most notorious polluters \u2014 Big Oil \u2014 to reduce nitrogen oxide<\/strong><\/a> emissions by as much as 90%. For those unaware, NOx is a key precursor to harmful smog.<\/p>\n

Because of the unique and patented design of ClearSign\u2019s Duplex Plug & Play burner, it also increases efficiency by up to 4%. This allows companies to reduce fuel costs to operate equipment\u2026 or increase throughput to produce more \u201cproduct\u201d with the same amount of fuel. So much so that the payback period is less than two years in most applications.<\/p>\n

In other words, it boosts corporate profits.<\/p>\n

It\u2019s no surprise then that several companies are already paying for its technology. Including an unnamed supermajor, PBF Energy Inc. (NYSE: PBF), Delek U.S. Holdings Inc. (NYSE: DK), Cenovus Energy Inc. (NYSE: CVE) and Andeavor (NYSE: ANDV) (formerly known as Tesoro).<\/p>\n

It\u2019s no surprise either that the country\u2019s toughest regulators<\/strong><\/a> are co-funding test installations, which is a precursor to eventually mandating usage.<\/p>\n

Bottom line: Don\u2019t just invest in green stocks for the sake of being green. Be smart and focus on companies that can actually deliver green results for everyone \u2014 the environment, corporations and investors.<\/p>\n

Ahead of the tape,<\/p>\n

Louis Basenese
\nChief Investment Strategist, Wall Street Daily<\/em><\/p>\n

The post Green Energy: Lost Cause or Must-Have Investment?<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com You know I favor microcap technology investing. My rationale is simple (and irrefutable)\u2026 No other investment on Earth rewards investors greater for hitting the bull\u2019s-eye. The problem is the bull\u2019s-eye always moves. Case in point: Roughly 10 years ago, the bull\u2019s-eye was squarely fixed on alternative energy. With oil prices above $100 per […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-116470","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/116470","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=116470"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/116470\/revisions"}],"predecessor-version":[{"id":116487,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/116470\/revisions\/116487"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=116470"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=116470"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=116470"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}