Friday, January 29, 2010

1-year Performance

A year after making stock selections, the results are in:


Ticker Symbol

Price (Jan. 22/09)

Price (Jan. 22/10)

% Change

Annual Dividends








Johnson & Johnson






First Solar Inc.






Johnson Controls, Inc







Western Wind Energy






FPL Energy












Cooper Industries






Waterfurnace Renewable Energies







American Superconductor






Spire Corp






Energy Conversion Devices Inc








Had I invested $1,000,000 in these stocks evenly, my portfolio would be worth $1,619,071.31 today.

Monday, June 1, 2009

A Word of Caution.....

“Those who do not remember their past are condemned to repeat their mistakes.” - George Santayana

“Fool me once, shame on you. Fool me twice, shame on me!” - Wise Fool

Anyone who had money invested in the stock market likely saw their portfolio plummet late last year as international markets imploded. Frustrated investors were popping up everywhere, decrying the systemic risk involved and threatening to simply throw in the towel. Confidence was thoroughly shaken, and getting people to invest money was like pulling teeth. Now, eight short months later, the market has rebounded nicely and all of our problems are over, right??

Well, not quite. We’re still subject to exactly the same systemic risk as before, only this time the market is much less stable. Before the crash, markets were over-leveraged and over-priced. We had seen unsustainable growth in the years prior, fueled by low interest rates, excess debt, and the belief that prices would keep going up. Human emotions succumbed to greed, and billions of dollars were added to the fire in anticipation of ever greater returns. Unfortunately, people got burned. Now, only eight months later, I am seeing a similar pattern of irrationally fast growth. Although I cannot predict the specific event that will trigger the next collapse, there are many economic risks embedded in the system. Another shock in oil or food prices could have devastating consequences, and both have been overly volatile lately. Likely, it will be something that nobody sees coming...

The Dow Jones Industrial Average has rebounded 28.9% to 8500 points since its low on March 9th. The Toronto Stock Exchange has outperformed, gaining 37%. If markets continue to rise at this pace, then we will be back to pre-crash levels by the end of September. In my humble opinion, this is unlikely to occur. Sure, prices probably dipped too low in March as the apocalypse was priced in, then was avoided; and there’s still plenty of money left on the sidelines that could start buying to push prices up. But when I see that markets are up another 2.5% today with no real rationality behind it, I can’t help but shake my head skeptically. Are these markets priced correctly?? Almost certainly not. So the question remains, are they going up or down in the near-term?

Since day one, I’ve been told that to really make money in the stock market you can’t follow the herd mentality. You have to buy when others are selling, and sell when others are buying. Easy to say, this strategy is extremely tough to implement. The pull of collective psychology is very powerful. It requires conviction, trust, and a nice pair of cajones to buy when prices are low because everyone's afraid and to sell when confidence is soaring so they’re high. It’s easy to fall into the trap of riding a winning rally too long, especially when you’ve just suffered a big hit. I won't try to give advice in these volatile markets, but I'm selling off a portion of my virtual portfolio and am creating sell-stop orders to protect against another meltdown.

If you’re young and don’t intend to cash out anytime soon, then you really have nothing to worry about. But if you’re counting on your investments for income or earnings, then you might want to ask yourself how much risk you’re willing to accept. These are challenging times, and I’d hate to see my friends get burned again.

Thursday, April 30, 2009

100 Day Update

It’s crazy to think that 100 days have passed since Obama became president! So much has changed, grown, and evolved since January 20th. On that day, I created a virtual portfolio of american stocks that I felt were profitable sustainability leaders. After watching it tumble throughout Feb and early March, it’s been extremely profitable ever since. My portfolio is up 8.9% total since Jan. 20, and since I’ve kept about 1/3 in cash, my investments have grown even more than that!

I suppose it’s easy to look like a genius in a good market, but I am proud! The S&P 500 and MSCI World (the two major benchmarks) are both sitting almost exactly where they were 100 days ago, which means that I’ve outperformed! Where’s my bonus?? =)

I’ve learned some very important lessons by keeping this virtual portfolio, most importantly about market timing. Although my sustainability knowledge helps me to identify good companies, I am not an expert in deciding when to buy or sell. I’ve mostly been trusting my gut on when to pull the trigger on a trade, and I’ve still got lots to learn in this area.

Big Winners

JCI - Although I bought this stock on the way down, it has come back strongly since mid-March, doubling from its low. I wish I had bought more in March!

ENOC - This stock has gone nowhere but up since I bought it! From $8.51 to $18.06 today!!

FSLR - This company wouldn’t have made me any money if I wasn’t paying close attention. I noticed that it dropped precipitously Feb 25 - Mar 02. from $137.68 to $103.97. Seeing a bargain, I bought a whole bunch and was rewarded as has risen steadily since.

Big Losers

JNJ & CAT - These two companies have been my biggest disappointment. I thought that the first Obama stimulus would focus more on health and infrastructure. It didn’t. A big lesson I learned here is that behemoth sustainability leaders will take waaaay longer to adapt. I still like these companies in the long-term, but my money will earn more if invested elsewhere.

ENER - This stock has been flaccid at best because they delayed expansion plans that had been priced-in. I’ve kept buying more on the way down, and expect a rally soon.

Thursday, February 19, 2009


There are several ways to profit from the emerging Green Economy, and some the most exciting ventures are coming from the minds of successful ecopreneurs. With the rapid pace of the current economy, small businesses are adapting to changing conditions. Monolith companies like Ford and GM are struggling to re-invent themselves as the ‘economies of scale’ model of bigger-is-better proves to be cumbersome. Human demands are changing fast, and small businesses are much better at listening to their customer and fulfilling a specific need. Of the 577,000 people who lost their jobs in December, I’m sure thousands of them have a hobby, passion or creative talent that could be profitable. Small businesses account for virtually half of America’s labor force, so any economic recovery plan should include education and incentives for new startups. The entrepreneurial spirit is a truly powerful force, and can really get people motivated!

If you have an idea for a new business, remember that a small businesses plan should include an analysis of social and environmental impacts and benefits. If you can show that your business will cut carbon emissions, cater to under-serviced communities, or create green jobs then it will be much easier to find financing from investors and credit unions. There are lots of opportunities opening up in this new economy, so be creative when you see a gap! Green Businesses are great for creating a competitive advantage because people value sustainability, and will pay more for eco-friendly products and services. Finally, you can live your life knowing that you are contributing to economic and ecological development!!

Contact your nearest Small Business Association and create a plan to make money doing something that makes you smile!

Tuesday, January 27, 2009

One Week In

It's been a week since Barack Obama became president, and since I started my career as a virtual portfolio manager.

I'm very impressed with Obama's performance so far, especially in the realm of governmental transparency. is a truly amazing site, as elegant as it is detailed. Fortunately, his actions are speaking even louder than his words with the closing of Guantanamo Bay and his first 2 memoranda, which effectively raised the efficiency of automobiles in a direct attempt to reduce America's dependance on imported energy. Obama is certainly 'walking-the-talk' so far, and I am excited to watch his government slowly implement their broad strategy.

My first week on the Virtual Stock Exchange was a bit bumpy. Having put 2/3rds of my money in the game as Obama was getting inaugorated, my protfolio was down as much as 3.5% last week. My stocks fell in tune with the broad market, as financial stocks got pummelled again. Fortunately, the markets have been better so far this week, and I'm only down 2.68% at this moment. The big lesson I learned was to not buy all at once. By allocating so much of my portfolio at the onset, I limited my option to buy more as prices continued to drop. I think it's a really smart idea to buy and sell in smaller portions over time, never all at once.

One thing that is important to recognize is that for both Obama and myself, there is no precendent for our current context, and we will both make mistakes as we try to figure it out. I'm certainly trying to learn and evolve as I go, and let's hope for the world's sake that Obama's government can do the same.

Tuesday, January 20, 2009

Virtual Portfolio

Hi Loyal Fans!

I've just created a Virtual Portfolio that will help me build a track-record for my investment ideas! I hope that this will be a learning process, so that I can help you avoid the mistakes that I am bound to make. The post below describes my initial rationale, and why I feel that these stocks are a wise move.

Please comment if you have any thoughts or ideas to help me!

You can see my portfolio by clicking here

Wish me luck!!

Stocks for Obama's First 100 Days and Beyond!

President-elect Obama has chosen a Green Dream Team to inform his transition to a ‘new energy economy’ that will increase domestic sources of energy, with a focus on renewable sources. Moreover, a large stimulus package is expected within the first few weeks of his presidency that will spur business and create jobs. Based on what Obama has said, I’m assuming that we will see a boost in share prices of companies that stand to benefit in the short-term from this stimulus package, and in the long-term as the Green Economy emerges.

This strategy has two complementary goals:

-Generate a reasonable financial return on investment.
-Invest in sustainability leaders.

I’ve divided the companies into GOLD, SILVER, and BRONZE classes. Each company was assessed for it’s cash on hand, debt/equity ratio, and dividend yield. If a company’s dividend is not available, it’s probably because they are young and are reinvesting profits rather than distributing them to investors. I also performed a qualitative assessment of its sustainability strategy. The ideal candidates used a strategy called Backcasting, whereby a clear long-term vision is the guide for today’s practical initiatives. I was looking for sustainability reports (ideally the Global Reporting Initiative guidelines), strategic partnerships, and a demonstrated understanding of sustainability risks and opportunities.

****DISCLAIMER**** I do not own any of these securities, nor am I qualified to issue any recommendations. Systemic risks affecting the entire market are a threat to each of these holdings, regardless of business strengths and opportunities. My goal here is to educate ONLY. You should research the company further on your own terms before making any investment decisions. ****DISCLAIMER****

Here are the picks:


Caterpillar machines are synonymous with construction and infrastructure. I figured that this company stands to benefit from an Obama infrastructure stimulus. However, I was surprised to learn that they also had a wonderful long-term sustainability strategy. They produced a comprehensive GRI sustainability report in 2007, which detailed their vision as “to contribute, through diverse businesses, to a society in which people’s basic needs are not only met but fulfilled in a way that sustains the environment”. Caterpillar has operational goals set for the year 2020 including: reducing absolute greenhouse gas emissions by 25%; renewable sources for for 20% of energy needs; increase customer energy efficiency by 20%; zero waste to landfill; and more. Finally, they are using a Life Cycle Assessment to understand the environmental impact of their entire operation. Caterpillar has a large amount of debt on their books, but I am not worried about them going bankrupt.

Johnson & Johnson
With an aging population and a healthcare system in desperate need of resurrection, the Healthcare industry is poised to grow significantly under Obama’s administration. Even during hard economic times, people will continue to invest in their own physical well-being. Johnson & Johnson have produced one of the best sustainability reports I have ever seen, raising the bar of transparency leadership. Areas of improvement are: sustainable supply-chain; product stewardship; climate change mitigation; responsible research; and facilitating access to healthcare for those less fortunate. In 2006, JNJ created 5-year goals in the area of biodiversity, energy use and CO2 emissions, education, waste, water, transparency, and environmental literacy. On pace to meet most of these goals, JNJ is a corporate sustainability leader.

First Solar, Inc.
If Obama is serious about meeting renewable energy goals, solar electricity capacity needs to grow. First Solar is America’s most recognized solar company and should pop the most as investors flock to Greentech stocks. My prediction is that Obama will install solar panel on the White House within the first 100 days of his presidency, signaling a push towards residential and commercial solar power generation. With lots of cash and little debt, First Solar is well positioned financially to meet this new demand. Moreover, they use systems design to reduce cost and environmental impact throughout a product’s entire lifecycle. I expect this stock to pop in the next 100 days, and to continue growing for the next 10 years.

Johnson Controls, Inc.
Johnson Controls is a well-diversified company that is guided by the vision of “a more comfortable, safe and sustainable world“ and values like integrity, customer satisfaction, employee engagement, innovation, and sustainability. Delivering products from hybrid-car batteries to HVAC systems, Johnson Controls also offers complete building efficiency services. Improving the efficiency of millions of buildings is a logical first-step for Obama as he tries to create green-collar jobs. Labor-intensive, it produces a high multiple of economic activity for every government dollar spent. Also, it serves the dual goals of lowering costs and reducing CO2 emissions, which makes it an attractive investment for businesses hoping to take advantage of the current low interest rates. Johnson Controls has used the GRI guidelines for their sustainability report, and they are a leader in employee education and engagement. I feel confident that they are moving in the right direction, and that Johnston Controls will grow in the new economy.


Western Wind Energy
For investors who want to incorporate wind into their portfolio, Western Wind Energy is a good choice. They recently completed a financing that will increase their cash, and they have almost no debt. With many projects in development, Western Wind Energy should benefit from a government boost of clean energy prices and subsidies. Although they don’t produce a sustainability report, their focus on wind energy means that they will profit from the transition to a sustainable energy grid.

Florida Power & Light Energy
FPL Energy is an investor-owned utility company providing electricity throughout the state of Florida. They have produced a sustainability report (although not using GRI guidelines), and produce almost 80% of their energy using natural gas and wind (49% NG, 30% wind). As renewable energy targets are set, and carbon-intensive energy production is discouraged, FPL Energy will be leading the way for US utilities. Although they have lots of debt, their customer base is increasing and electricity distribution is generally recession-proof.

One of the big challenges facing an economy powered primarily by renewable energy is the problem of baseload. With intermittent energy sources like wind and solar, the fear is that energy demand could outstrip supply during busy times. ENERNOC provides a solution known as demand response. It allows companies to automatically curtail heavy energy use during peak times, when electricity is most demand (and therefore most expensive). Demand response is a win-win solution because it cuts corporate costs (by purchasing electricity when it is cheapest) and reduces the spikes of peak demand, allowing for a smoother transition to a new energy economy. Moreover, the company can assist large institutions (like Western Connecticut State University) to improve energy efficiency through monitoring and waste identification.

Cooper Industries
Although they provide an array of electrical products, Cooper Industries is starting to focus more on energy efficient lights and environmentally responsible electrical transformers. Their corporate social responsibility report was uninspiring, and did not use the GRI guidelines. Without a strong long-term vision and plan, Cooper Industries might not adapt as quicker as some other companies in this industry. That said, they have lots of cash, not much debt, and the stock is very undervalued. As efficiency and renewable energy go mainstream, expect Cooper to grow.

Waterfurnace Renewable Energies
Waterfurnace Renewable Energies installs heating/cooling geothermal systems to homes and businesses. Able to reduce a building’s energy consumption for heat, cooling, and hot water by 70%, geothermal heat pump systems require an upfront infrastructure investment. Normally, buildings balk at upfront costs like this, but with extremely low interest rates, this type of investment becomes very attractive. As energy efficiency standards become law, geothermal heating should become commonplace. Although they have no long-term sustainability strategy, Waterfurnace Renewable Energies has some good green initiatives. If geothermal technology catches on in the USA the way it has in Sweden and in Switzerland, then this company will generate huge profits.


American Superconductor
American Superconductor is a leader in high-efficiency power cables and electronic convertors. These products are crucial to the creation of a renewable energy grid, as their voltage control technologies are needed to connect wind farms to transmission grids. Although they have not communicated any sort of sustainability strategy, American Superconductor will be a critical company to the emergence of a new energy economy.

Spire Corp
Spire is a well-diversified company that sells turn-key solar production lines, medical devices and semiconductors. As the US decides to ramp-up solar panel production and new firms enter the market, expect this company to be extremely successful. A clear vision and sustainability report would make this company much more attractive to me, as there is no indication of a long-term sustainability strategy.

Energy Conversion Devices, Inc.
Energy Conversion Devices is a leader in two important industries: solar and storage. Under the UNI-SOLAR brand, ECD sells solar panels ideal for rooftop installation. They also operate the Ovonics Materials Division, which makes nickel hydroxide batteries used in all hybrid vehicles. They are also leaders in hydrogen technologies, which has the potential to further transform energy storage. Unfortunately, they have not yet communicated a sustainability strategy, and their long-term vision is unclear.