Archive for investing

The Morality of Shorting

“I’ve never advocated a short sale because I hate the idea of profiting from someone else’s misery.” So said regular AltenergyStocks author John Petersen, in an article where he broke his rule and advocated shorting Tesla Motors (TSLA)

I’ve heard variations on this phrase hundreds of times, and I’ve long disagreed. But this time the phrase was coming from the keyboard of colleague whose intelligence I greatly respect, so it got me thinking.

I questioned my previous stance… is shorting immoral because you are profiting from the misery of the long investors? But I had to conclude that there are many instances when shorting is essentially moral.

Consider, a company whose business is profiting from the misery of others. For instance, a tobacco company, such as Phillip Morris (MO), to take a fairly un-controversial example. Aren’t the investors who own MO stock profiting from the misery of others? Wouldn’t the most moral course be to short MO, rather than going long?

There is a current of belief on Wall Street that, in the immortal words of Gordon Gekko, “Greed is Good” and the pursuit of maximum gain brings benefits to society. If you subscribe to this beleif, then of course there is nothing wrong with shorting, so long as you make money.

Yet if you reject the “Greed is Good” premise, and feel that there should be some moral dimension to our investment choices, you cannot also reject shorting out of hand. To do so would be to assume that all public companies are working for society’s best interests, something I find more than a little hard to swallow.

I have to conclude that shorting in and of itself is neither good nor bad… just as buying stocks is neither good nor bad. To decide if shorting a stock is good or bad, you first have to decide on your opinion about the morality of the company you are shorting or investing in. Your stock purchases are only as good as the companies you are buying, and your stock shorts are only as bad as the companies you buy are good.

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Three Upcoming Public Appearances

Tuesday, Oct 19, 6pm-8pm, Springfield MA. Which Clean energy Investments are Right for You?

Thursday Nov 4, Making Plays in Alternative Energy, Panel at Inside Commodities Conference, The New York Stock Exchange, NYC.

Tuesday, March 8, 2pm-5pm. Half day workshop. Greening Your Portfolio: How to Select Clean Energy Mutual Funds, Exchange Traded Funds and Stocks

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A lot of people have been coming to this blog looking for a site called “Greener Money” that supposedly offers free green financial advice. I don’t know where it is, but here is a series of articles about how to invest in Green Energy for beginners.

I’ve closed the comments on this post because people were writing to ask me for a free book. I don’t know where to get this free book, I just write a magazine column called Greener Money, and that is drawing search engine hits.

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Investing in Biomass

I’ve recently said that the best way to invest in both Advanced Biofuels and Cellulosic Ethanol, and Biochar (aka terra preta) is to invest in Biomass. Here is one way to go about it: buying Forestry ETFs or Stocks.

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The Algonquin Power Income Fund

I recommended the Algonquin Power Income Fund as a renewable energy income investment back in January, and as part of my ten clean energy picks for 2009.

Since then, both the stock and the ten picks have been doing well in comparison to the market, but Algonquin has entered into a couple deals, while I look into in a recent update on the Algonquin Power Income Fund.

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Since I’ve recently been bearish on the market, but don’t want to wait on the sidelines, and expect that many of my readers feel the same way, I just published two articles on hedging strategies.

  • A hedging how-to, with five ways to hedge, and a simple method to fine-tune your strategy
  • How I’ve recently adjusted my hedging strategy to accomodate the insights of Taleb’s The Black Swan.</li>
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    The Raser Technologies (RZ) Saga

    A month ago, I bought Raser (RZ) in a gamble that one of thier plans to get project financing would pay off quickly. Unfortunately, the one I thought was most likely of these, an application for a DOE grant gaurantee, was rejected last week, so I sold at a slight loss.

    I’ll be keeping an eye on Raser (RZ) to see if I can pick it up again at a reduced price… there’s still a chance of a quick win if they get funding elesewhere.

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    List of Smart Grid Stocks

    Looking for a list of Smart Grid Stocks? Try this.

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    Market Predictions

    Predicting market moves is notoriouslly difficult, but I’m feeling pretty good about my recent efforts.
    On October 11, 2008, I stoped being a permabear and said, “the market as a whole now seems to me to be fairly valued.” The S&P 500 closed the previous Friday just below 900; today it closed at 919.32. In the fear that abounded last October, it was a hard call to be even that bullish, bit it seems to have worked out.

    On June 2, I said we were near a market peak/ The S&P 500 closed that day at 944.74, and is currently down 3% almost a month later, having only bearly exceeded that number by a fraction of a percent.

    Since I’m currently short-term bearish, I’ve started a series of articles not to by now, but to buy when a market decline puts them back on sale. Here are may clean enrgy shopping list articles so far:

  • Transmission stocks
  • Energy Efficiency Stocks
  • Clean Transport Stocks
  • Why market timing makes sense
  • Two Landfill Gas and Three Geothermal Stocks
  • Five Solar Stocks
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    Ethanol, Cellulosic Ethanol, and Advanced Biofuels

    Last week, I attended the 2009 Fuel Ethanol Workshop and the Advanced Biofuels Workshop, writing two articles.  The first is a commentary on what the corn ethanol industry needs to do to rehabilitate its image, and the second looks into how the stock investor can benefit from emerging advanced biofuel, cellulosic ethanol, and
    algae technologies.

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    Solar Stocks

    In May, I went to Solar 2009.

    One panel I attended led to a series of articles on Solar stocks:

  • The outlook for solar stocks
  • Why First Solar (FSLR) is a risky bet.
  • Why Solar Millenium may have what it takes.
  • I also particpated, with presentations on the best incentives for solar investments, and with an analysis of large scale electricity storage, as well as alternative renewable electricity integration strategies.

    Charles also attended, and took a look at the implications of the removal of the $2000 cap on the residential Investment Tax Credit.

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    Portfolio Performance Updates 2009

    My Ten Clean Energy Stocks for 2009 has been beating the market and the clean energy sector handily, although the riskier Ten Clean Energy Gambles for 2009 has only been performing in-line with the sector
    John Peterson’s cautious approach to the energy storage sector ("Cheap before Cool") has also been performing well.

    In tough economic times, it goes to show that playing it conservative pays off, even when the clean energy sector is getting a political boost.

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    ARRA Symposium notes, March 10 2009

    I’ll be referencing these notes in an article to be published on as What the ARRA Means for Clean Energy: One State’s Example on March 15th.

    Read the rest of this entry »

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    Renewable Energy Funds

    I’ve posted an updated and more in-depth look at clean energy and renewable energy mutual funds. Also of interest may be an article on how actively managed clean and renewable energy funds compare to the passively manged/index variety.

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    Renewable Energy (and other) ETFs

    I’ve published an updated run-down of Clean Energy Exchange Traded Funds, as well as a look at those clean energy ETFs which have Exchange Traded options on them (and why you might care.)

    On the subject of ETFs, I was shocked when I took a closer look at Doubleshort and Ultra ETFs, and this led me to do a couple reshuffles of ETFs in my portfolio.

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    Five Top 10 Lists for 2009

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    Investing in Obama’s Stimulus Plan

    Since Obama’s election, my partent Charles and I have been looking at what Obama’s refreshing attitude towards Renewable Energy and Energy Efficiency, combined with the credit crunch, will do for some of our favorite stocks… here are the highlights:

    Companies that may benefit from a solar glut

    How Oil prices affect Alternative Energy Stocks

    Emissions trading stocks under Obama

    What might happen to Solar Photovoltaic companies if consumers pull back

    Charles and I expect divened paying companies to come back into vogue. He has a few dividend paying alternative energy companies and I have a couple dividend paying energy efficiency companies to consider.

    I also revisited my list of Blue Chip Alternative energy companies to see which ones might benefit from the expected stimulus package, while Charles looked at Smart Grid stocks that might benefit from a stimulus package. One technology I’m betting on is Geothermal heat pumps.

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    Trading Strategy During Financial Freefall

    When the current crisis began with the fall of Lehman, I decided to get out of my most speculative and worst capitalized Renewable Energy companies, and I wrote a series of articles on each. Now, I’m looking exclusively at companies involved in energy efficiency technologies, and technologies which help customers shift their demand to when or where it is cheaper (smart grid and transmission.)

    Here’s an index to the articles on the stocks I sold:

    1. Held: UQM Technologies (UQM)
    2. Sold: Carmanah Technologies (CMHXF)
    3. Sold: Pacific Ethanol (PEIX)
    4. Sold: Dynamotive Energy Systems (DYMTF)
    5. Sold: Nova Biosource Fuels (NBF)
    6. Sold: VRB Power (VRBPF)
    7. Sold: Electro Energy, Inc. (EEEI)

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    Flying too Close to the PetroSun

    Algae is the most promising source to produce oil in the quantities needed to displace any significant amount of petroleum. Can is Petrosun (Pink Sheets: PSUD) the company to fulfill this promise? I doubt it; follow the link to find out why.

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    Investments for Peak Oil

    I’ve written a series of articles over the past few weeks focussing on what a green investor can do to prepare for and profit from peak oil:

    Peak Oil and Your Lifestyle

    Behavioral Finance and Mass Transit

    New Flyer: A Stock to Hedge Peak Oil

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