Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Climate change funds
    Thank you for the suggestions. I had forgotten about GAAEX, although I have looked at it in the past.
    Will look at them and report back.
    I think you can break down the ideas into a lot of categories and find ideas and ETFs for most of them. This is not the ideal, as most ETFs are index funds and the solutions are likely to come form ideas little known now
    the things I am looking at are Alternative energy, Industrial electrification, energy storage, nuclear power, Basic materials that are necessary ( ie copper, Lithium, nickel uranium, and industrial processes like carbon capture, Water infrastructure, recycling and process innovation.
    A lot of the ETFs load up on the latter with MSFT, GOOGL, and of course TSLA
  • Climate change funds
    Barron's had a short article on Climate change funds, maybe in honor of the Glasgow conference.
    I have been putting small amounts into solar, wind and alternative energy ETFs mostly but a lot of them seem based only on indexes, and I think active management has a far better chance of success.
    The other push for "ESG" funds seems to be too broad to allow a focus only on the transition to a low carbon environment.
    This will concentrate on alternative energy, grid development, energy storage, nuclear power, materials like lithium, uranium, carbon capture, water infrastructure etc, not good governance, inclusiveness, or other desirable social goals that have little to do with low carbon.
    There seem to be only a few actively managed Climate Change Funds available, like GMOs' GCCHX but it has minimums far out of the reach of mere mortals. A number of hedge funds are getting involved, and have lots of information, but again unless you have $1,000,000 or more you are on your own.
    Has anyone done any significant research here?
  • PRWCX Cuts Equity Exposure
    I'm not sure about 1968 - 1981, but between 1973 and 1980, while the stock market roughly doubled utilities, well, roughly doubled.
    Over the indicated periods, $100 grew to:
    Utilities: 1973-1989 $711 (7x), 1981-1990 $352 (3.5x) => 1973-1980 2x
    Stocks: 1973-1989 $613 (6x), 1981-1990 $303 (3x) => 1973-1980 2x
    Okay, the calculation isn't perfect. I'm using the time frame from 1973-1989 and factoring out data from 1981-1990, while what should be factored out is 1981-1989.
    (Utilities did a tad better than the S&P500 in 1990, losing only 0.63% to the 500's 3.18% loss.)
    Despite rising interest rates, despite inflation (which hit the energy sector - the raw material for utilities - harder than the economy as a whole), utilities didn't come off too badly.
    (3 mo T-bill returns jumped from 4.07% in 1972 to 7.03% in 1973, generally remaining above 5% and moving into double digits at the end of the 70s. Inflation first broke 6% in 1973, roughly doubling the 1972 figure, roughly doubling again in 1974 to 11%, generally remaining about 6%, returning to double digits at the end of the 70s.)
    A broader point is that aside from an expectation of rising inflation and interest rates, the utilities sector is substantially different from it was in the 70s. Then it was heavily regulated. Because of that regulation, investors expected a nearly guaranteed rate of return and little appreciation. Though because of rapidly rising costs (energy prices), the industry often failed to achieve those "guaranteed" returns in the 70s.
    Still, I'm not expecting another reduction in oil production (with commensurate price hikes) due to an Arab oil embargo after a war with Israel (1973) or due to a revolution in Iran (1979).
    Since deregulation took off in the 80s, since power generation was separated from transmission, it's a completely different business environment. In the 70s, nuclear power was all the rage, and the industry benefited from the government covering plants in case of, um, mishaps.
    Today, nuclear is declining, and other utilities have to bear the cost of their negligence. Such as PG&E:
    In a news conference, Shasta County District Attorney Stephanie Bridgett announced the 31 charges, including 11 felonies, against the company. She said in July that her office had determined that PG&E was “criminally liable” for last year’s Zogg Fire, which burned near Redding.
    The filing also includes felony arson charges against PG&E for "recklessly igniting" three other fires, all occurring in Shasta County in the last year and a half before and after the Zogg Fire.
    PG&E equipment has been found responsible for some of the most destructive wildfires in California history, including the 2018 Camp Fire in Butte County that left more than 80 people dead. More recently, PG&E reported to California utility regulators that its equipment may have been involved in the start of the Dixie Fire burning in Northern California.
    Such as the electric utility companies operating in Texas:
    Part of the responsibility for the near-collapse of the state’s electrical grid can be traced to the decision in 1999 to embark on the nation’s most extensive experiment in electrical deregulation, handing control of the state’s entire electricity delivery system to a market-based patchwork of private generators, transmission companies and energy retailers.
    The utility industry over the past third of a century or so is simply not the same as the regulated, widows and orphans industry it was prior to the 80s.
  • Ignoring Energy Transition Realities as We Greenify
    Bill Gates and Warren Buffett are building a $1 billion 'next-generation' nuclear reactor in Wyoming...
    The plant, which features a sodium reactor and molten salt energy storage system, would be safer, perform better, and be less expensive than traditional nuclear power, Gates said in a press briefing.
    Petrostates See Dire Consequences If World Rejects Oil Too Fast...
    It’s no surprise that top officials from the world’s largest fossil fuel exporters want to see the industry continue for decades to come. Their comments are illustrative of the vast gulf between the world’s current carbon-based energy system and the changes required to prevent damaging climate change.
  • For Bonds, Add Safety by Venturing Abroad
    Not sure if the class would agree that these are bond funds per se but as best as I can answer your question, in order of largest holding to less of:
    PMEFX (Penn Mutual AM 1847 Income) - some would argue more of a balanced income fund
    I-Bonds - let's see what inflation rate portion is come May 1st...I'm thinking this could pay out over 2.5%, no state taxes, indexed to inflation, US Govt has printing press and nuclear aresenal and reserve currency so likely amongst safest investment avail.
    FPFIX - FPA Flexible fixed income
    Good Luck to you and all,
    Baseball Fan
  • Digging into Ark Innovation's Portfolio
    Not trying to have innuendo in my writing, sorry. I mean that I don’t think the invention of nuclear weapons was as beneficial for humanity as that of penicillin, yet the free market tends to treat these innovations equally or, worse, favors whichever one is more profitable to sell. The subtext to the notion that more regulation is bad for innovation is that all technological advancement is good and the government should just get out of the way. Also embedded is the idea that unregulated businesses themselves don’t try to stifle innovation when it hurts their bottom lines. We probably would’ve had the electric car fifty years ago were it not for the big auto and fossil fuel companies. Government officials in the U.S. are ostensibly elected by the people who may or may not want more regulation of certain technologies. CEOs are not elected by the people and often do as they please regarding technology so long as it makes them and shareholders money. If that means developing technology that manipulates you into buying certain products, voting for certain candidates and invading your privacy so be it. If it means creating technology that stifles innovation by smaller competitors also so be it.
  • Ignoring Energy Transition Realities as We Greenify
    Aside from the environmental waste disposal problem and labor/community radiation exposure problem, the cost advantages of nuclear don't appear to be there. From the previous link:
    Existing nuclear plants have relatively low operation, maintenance, and fuel costs compared to many fossil fuel plants; however these routine costs still make nuclear power economically uncompetitive in comparison with natural gas, wind, and solar.
    New nuclear plants are another matter altogether; their continuing high construction costs make them uneconomical. Between 2002 and 2008, cost estimates for new nuclear plant construction rose from between $2 billion and $4 billion per unit to $9 billion per unit, according to a 2009 report by the Union of Concerned Scientists. In reality, even those astronomical projections have been surpassed. The two new units at the Vogtle Plant in Georgia, the only new nuclear construction in the United States, are now years behind schedule and projected to cost more than twice their original budget of $14 billion. Similarly, it was estimated that Duke Energy’s proposed Levy County Nuclear Power Plant in Florida would cost $5 billion, but projections ballooned to $22 billion. The project was canceled in 2017, and Duke Energy decided to focus on solar energy expansion instead.
    Reactors also typically require a long period of planning, licensing, and building. The 2019 World Nuclear Industry Status Report (WNISR) estimates that since 2009 the average construction time for nuclear reactors worldwide was just under 10 years.
    The WSINR report also estimates that the cost of generating nuclear energy ranges between $112 and $189 per megawatt-hour (MWh), while solar power costs between $36 and $44 and onshore wind power comes in at $29 to $56.
  • Ignoring Energy Transition Realities as We Greenify
    Nuclear plants are prob best resources but don't build one in my backyard (maybe most MFOers may feel same way) but perhaps 1000 miles away
  • Ignoring Energy Transition Realities as We Greenify
    If you're going to discuss something as serious as the future of the planet's environment and our energy supply, I would recommend finding a more objective source than a natural resources money manager who invests primarily in oil, nuclear power and mining has largely failed at it--
  • Ignoring Energy Transition Realities as We Greenify
    Report on Energy Transitions (from Fuller Treacy Money):
    We are making a terrible mistake when it comes to future energy policies. In previous letters, we have touched upon the challenges of the so-called “energy transition.” Today, we will explain in detail the imminent harm awaiting investors and policy makers who fail to acknowledge certain realities. Every green energy proposal we have examined relies on the trifecta of wind, solar, and electric vehicles combined with various battery technologies. In recent months, a renewed “hydrogen mania” has broken out as well, which adds a fourth leg to the green energy stool. Unfortunately, based upon our extensive research, these plans, including the current hydrogen craze, are bound to at best severely disappoint and, at worst, outright fail in what they attempt to accomplish.
    we believe there is a more straightforward, feasible solution. Nuclear power is the only technology that can provide reliable carbon-free base-load power. Any proposal seeking to seriously address carbon emissions must heavily incorporate nuclear electricity generation. Unfortunately, none of the current proposals include a material nuclear contribution. There is some reason to be optimistic however the Biden administration has acknowledged the need for nuclear power in combating climate change and may signal an important impending change in policy outlook.
    Follow up Information:
    Nuclear & Uranium ETF (NLR) pays a 2.31% dividend and has a P&E of 14
    Link to Overview:
    Vaneck Website:
    Search word "Nuclear" here at MFO:
  • Well isn't this special........D.C.
    That is a good one - moral compass! Trump never has one as his niece, Mary pointed out in her book. The only things he worships is money and power.
    Pence does not want to invoked 25th amendment. Article of impeachment takes time for voting. But he has access to the nuclear arms and that can be very dangerous for the country.
  • VanEck Vectors Coal ETF to liquidate
    In my experience, the GOP tends to care more about the unborn than the living. Force women to have babies, but provide minimal to no healthcare, daycare, education or financial assistance to the poor who are often poor because they come from broken homes with single mothers. There is also the hypocrisy of opposing women's rights to choose while supporting the death penalty, unrestricted gun rights, building up our nuclear arsenal, starting wars with countries that did not attack us and supporting drill-baby-drill energy policies--including coal mining--that are killing the planet slowly and are an existential threat to humanity. The thing about the anti-Women's rights to choose issue is it is relatively cheap for the GOP fight. It doesn't cost the party a penny to say No. It would cost a lot more for them to provide women with adequate healthcare, childcare, housing, schooling and intervention to assure a healthy upbringing for what otherwise become unwanted children.
  • The Making of Biden's Superfast Push for Clean Electricity
    I was in a side branch of this business and see a lot of grey in the topics. One thought, when determining how much solar capacity is needed the studies need to include 7 to 10 days worth of batteries to allow for a string of dreary winter days. Or, as an alternative, a supply of natural gas plants that can run when necessary. And to insure those plants are always available, they need to be duel fuel - diesel fuel - backup.
    If you want to question your beliefs (on both sides?) I recommend you check out Judith Curry’s site.
    Also books such as: Apocalypse Never: Why Environmental Alarm Hurts Us All, by Michael Schellenberger reinforce racqueteer’s points. His primary recommendation is that the world focus on developing nuclear power.
  • The Making of Biden's Superfast Push for Clean Electricity
    Isn’t it funny how Racqueteer said five posts ago “OK, last try for me,” yet he continues to argue his false position that attempting to eviscerate a Democratic clean energy policy that doesn’t even have all its details in place yet is “not political” as if scientifically there were another better policy put forward by the political opposition. The GOP has no real clean energy policy at all because it continues to argue as part of its libertarian death cult that anthropogenic climate change is a liberal hoax or that there’s nothing little old America can do as the second largest emitter of carbon emissions in the world. If you think you have a better plan, Racqueteer, submit it to the president elect’s team or apply for a job there. I’m sure if you’re as knowledgeable as you claim, they’ll hire you. Yet why do I suspect your “last try” wasn’t your last one and we’ll have another all-cap filled response? This isn’t about the truth or solving the problem for you. It’s about winning and getting the last word. So go ahead, and when you’re done submit your better ideas to the new president.
    Oh wait, it seems like part of Biden’s failure of a clean energy plan includes nuclear:
    I guess just send your geothermal idea with your resume because no one on Biden’s team is smart enough to think of that.
  • The Making of Biden's Superfast Push for Clean Electricity
    Raq, you can't possibly say anything, even a bit, of criticism of any Dem agenda no matter what, even if you are one of them ;-) I love it.
    There is only one good doable solution NUCLEAR.
    Has its own problems, but in terms of CURRENT technology and potential for a 15-20 year rollout, yeah, it's probably the only actual potential 'solution' to the energy/pollution problem, and would probably have a positive impact on CO2 increase and its effects as well. A trade off...
  • The Making of Biden's Superfast Push for Clean Electricity
    Raq, you can't possibly say anything, even a bit, of criticism of any Dem agenda no matter what, even if you are one of them ;-) I love it.
    There is only one good doable solution NUCLEAR.
  • Janet Yellen supposedly Biden's pick for Treasury Secretary
    @wxman123 You think fighting climate change is just about saving sea otters? Bless your heart, your ignorance would be almost charming if it wasn't killing the planet:
    Burning Down the House
    Alan Weisman
    August 15, 2019 Issue
    The Uninhabitable Earth: Life After Warming
    by David Wallace-Wells
    Tim Duggan, 310 pp., $27.00
    by Bill McKibben
    Henry Holt, 291 pp., $28.00
    Climate scientists’ worst-case scenarios back in 2007, the first year the Northwest Passage became navigable without an icebreaker (today, you can book a cruise through it), have all been overtaken by the unforeseen acceleration of events. No one imagined that twelve years later the United Nations would report that we have just twelve years left to avert global catastrophe, which would involve cutting fossil-fuel use nearly by half. Since 2007, the UN now says, we’ve done everything wrong. New coal plants built since the 2015 Paris climate agreement have already doubled the equivalent coal-energy output of Russia and Japan, and 260 more are underway.
    Environmental writers today have a twofold problem. First, how to overcome readers’ resistance to ever-worsening truths, especially when climate-change denial has turned into a political credo and a highly profitable industry with its own television network (in this country, at least; state-controlled networks in autocracies elsewhere, such as Cuba, Singapore, Iran, or Russia, amount to the same thing). Second, in view of the breathless pace of new discoveries, publishing can barely keep up. Refined models continually revise earlier predictions of how quickly ice will melt, how fast and high CO2 levels and seas will rise, how much methane will be belched from thawing permafrost, how fiercely storms will blow and fires will burn, how long imperiled species can hang on, and how soon fresh water will run out (even as they try to forecast flooding from excessive rainfall). There’s a real chance that an environmental book will be obsolete by its publication date.
    I’m not the only writer to wonder whether books are still an appropriate medium to convey the frightening speed of environmental upheaval. But the environment is infinitely intricate, and mere articles—much less daily newsfeeds or Twitter—can barely scratch the surface of environmental issues, let alone explore the extent of their consequences. Ecology, after all, is about how everything connects to everything else. Something so complex and crucial still requires books to attempt to explain it.
    David Wallace-Wells’s The Uninhabitable Earth expands on his 2017 article of the same name in New York, where he’s deputy editor. It quickly became that magazine’s most viewed article ever. Some accused Wallace-Wells of sensationalism for focusing on the most extreme possibilities of what may come if we keep spewing carbon compounds skyward (as suggested by his title and his ominous opening line, the answer “is, I promise, worse than you think”). Whatever the article’s lurid appeal, I felt at the time of its publication that its detractors were mainly evading the message by maligning the messenger.
    Two years later, those critics have largely been subdued by infernos that have laid waste to huge swaths of California; successive, monstrous hurricanes—Harvey, Irma, and Maria—that devastated Texas, Florida, and Puerto Rico in 2017; serial cyclone bombs exploding in America’s heartland; so-called thousand-year floods that recur every two years; polar ice shelves fracturing; and refugees pouring from desiccated East and North Africa and the Middle East, where temperatures have approached 130 degrees Fahrenheit, and from Central America, where alternating periods of drought and floods have now largely replaced normal rainfall.
    The Uninhabitable Earth, which has become a best seller, taps into the underlying emotion of the day: fear. This book is meant to scare the hell out of us, because the alarm sounded by NASA’s Jim Hansen in his electrifying 1988 congressional testimony on how we’ve trashed the atmosphere still hasn’t sufficiently registered. “More than half of the carbon exhaled into the atmosphere by the burning of fossil fuels has been emitted in just the past three decades,” writes Wallace-Wells, “since Al Gore published his first book on climate.”
    Although Wallace-Wells protests that he’s not an environmentalist, or even drawn to nature (“I’ve never gone camping, not willingly anyway”), the environment definitely has his attention now. With mournful hindsight, he explains how we were convinced that we could survive with a 2 degrees Celsius increase in average global temperatures over preindustrial levels, a figure first introduced in 1975 by William Nordhaus, a Nobel prize–winning economist at Yale, as a safe upper limit. As 2 degrees was a conveniently easy number to grasp, it became repeated so often that policy negotiators affirmed it as a target at the UN’s 2009 Copenhagen climate summit. We now know that 2 degrees would be calamitous: “Major cities in the equatorial band of the planet will become unlivable.” In the Paris Agreement of 2015, 1.5 degrees was deemed a safer limit. At 2 degrees of warming, one study estimates, 150 million more people would die from air pollution alone than they would after 1.5 degrees. (If we include other climate-driven causes, according to the Intergovernmental Panel on Climate Change, that extra half-degree would lead to hundreds of millions more deaths.) But after watching Houston drown, California burn, and chunks of Antarctica and Louisiana dissolve, it appears that “safe” is a relative statement—currently we are only at 1 degree above preindustrial temperatures.
    The preindustrial level of atmospheric carbon dioxide was 280 parts per million. We are now at 410 ppm. The last time that was the case, three million years ago, seas were about 80 feet higher. A rise of 2 degrees Celsius would be around 450 ppm, but, says Wallace-Wells, we’re currently headed beyond 500 ppm. The last time that happened on Earth, seas were 130 feet higher, he writes, envisioning an eastern seaboard moved miles inland, to Interstate 95. Forget Long Island, New York City, and nearly half of New Jersey. It’s unclear how long it takes for oceans to rise in accordance with CO2 concentrations, but you wouldn’t want to find out the hard way.
    Unfortunately, we’re set to sail through 1.5 and 2 degree increases in the next few decades and keep going. We’re presently on course for a rise of somewhere between 3 and 4 degrees Celsius, possibly more—our current trajectory, the UN warns, could even reach an 8 degree increase by this century’s end. At that level, anyone still in the tropics “would not be able to move around outside without dying,” Wallace-Wells writes.
    The Uninhabitable Earth might be best taken a chapter at a time; it’s almost too painful to absorb otherwise. But pain is Wallace-Wells’s strategy, as is his agonizing repetition of how unprecedented these changes are, and how deadly. “The facts are hysterical,” he says, as he piles on more examples.
    Just before the 2016 elections, a respected biologist at an environmental NGO told me she actually considered voting for Trump. “The way I see it,” she said, “it’s either four more years on life support with Hillary, or letting this maniac tear the house down. Maybe then we can pick up the pieces and finally start rebuilding.” Like many other scientists Wallace-Wells cites, she has known for decades how bad things are, and seen how little the Clinton-Gore and Obama-Biden administrations did about it—even in consultation with Obama’s prescient science adviser, physicist John Holdren, who first wrote about rising atmospheric CO2 in 1969. For the politicians, it was always, foremost, about the economy.
    Unfortunately, as Wallace-Wells notes:
    The entire history of swift economic growth, which began somewhat suddenly in the eighteenth century, is not the result of innovation or trade or the dynamics of free trade, but simply our discovery of fossil fuels and all their raw power.
    This is our daily denial, which now flies in our faces on hurricane winds, or drops as hot ashes from our immolated forests and homes: growth is how we measure economic health, and growth must be literally fueled. Other than nuclear energy, which has its own problems, no form of energy is so concentrated, and none so cheap or portable, as carbon. By exhuming hundreds of millions of years’ worth of buried organic matter and burning it in a couple of centuries, we built our dazzling modern civilization, not noticing that its wastes were amassing overhead. Now we’re finally paying attention, because hell is starting to rain down.
    I encourage people to read this book. Wallace-Wells has maniacally absorbed masses of detail and scoured all the articles most readers couldn’t finish or tried to forget, or skipped because they just couldn’t take yet another bummer. Wallace-Wells has been faulted for not offering solutions—but really, what could he say? We now burn 80 percent more coal than we did in 2000, even though solar energy costs have fallen 80 percent in that period. His dismaying conclusion is that “solar isn’t eating away at fossil fuel use…it’s just buttressing it. To the market, this is growth; to human civilization, it is almost suicide.”
  • David Giroux, Finding Overlooked Opportunities in the COVID-19 Market
    From Giroux's article:
    DG: One of our favorite sectors continues to be utilities. The equity market has yet to fully grasp just how attractive utilities are today relative to the past. The emergence of low-cost renewables is a game changer for the industry. This megatrend will likely continue for the next two decades to drive an elongated cycle for replacing coal, nuclear, and inefficient natural gas with wind, solar, and battery solutions that can drive mid- to high-single-digit rate base growth, mid-single-plus earnings per share growth with attractive dividends, only modest growth in customer bills, and a dramatic reduction in carbon emissions. Given this very attractive long-term outlook combined with this significant underperformance, we believe the long-term opportunity for utilities is compelling.
    Utilities is the one sector in which higher taxes don’t negatively impact earnings, as taxes are a pass-through item from a regulatory standpoint. Utilities would also benefit from a likely extension, and potential expansion, of wind and solar tax credits for renewables.
    Also discussed opportunities in fixed income.
  • Scary / “AI” Advances
    SkyNet was in the movie "The Terminator" 20 years ago.
    SkyNet, or Titan[1], is a highly-advanced computer system possessing artificial intelligence. Once it became self-aware, it saw humanity as a threat to its existence due to the attempts of the Cyberdyne scientists to deactivate it once it had gained self-awareness. Hence, Skynet decided to trigger the nuclear holocaust: Judgment Day. Later, it would wage the War against the humanity by developing and deploying an army of Hunter-Killers and Terminators. The survivors had formed a group called the "Resistance" under the leadership of John Connor.
    The concept of self-awareness was revealed in the movie, I, Robot starring Wil Smith and Bridget Moynahan.
    Unmanned vehicles are developed to go places where human cannot. For example, deep sea exploration today are often performed with Remotely Operated Vehicles (ROV) to depth well beyond conventional submarines. Hopefully these robots are being used to benefit mankind instead for destructive purposes.