Clean Transportation

Two related pieces of news yesterday, one that was the day's headline and the other that drew a little less attention. First, the big news: auto makers, especially US-based ones, got hammered by their product mixes. As expected, Americans are responding to a rise in gasoline prices by turning away from trucks and demanding cars, especially small ones. Of course, this spells nothing but hard times for the likes of Ford, GM and Chrysler, who are still hungover from a decade-long party fueled by high-margin pick-up trucks and SUVs. Economic incentives, whether state-imposed or market-driven, work after all....

Value Investing A few months ago, I discussed my encounter with Warren Buffett, and promised that I would eventually analyze a stock using the value investing (VI) approach. While I can`t say that I qualify as a hardcore value investor, there are many things about the VI approach that have influenced my thinking. For instance, I tend to stay away from very high PE stocks and momentum plays. While I take positions in firms with no earnings, they are generally relatively "unknown" or are past star stocks that investors have moved on from. I like the idea...

I took a small position today in Railpower Tech (RPWRF.PK or P.TO) at C$0.46. Tom briefly discussed Railpower last November in an article on rail stocks. I don't want to dwell too much on how I view the macro picture for rail, but suffices to say that a combination of increasing fuel prices and concerns about climate change is re-kindling interest in this sector in a significant way across North America (in other regions of the world, mainly Europe, the interest never really vanished in the first place). Tack on top of that the potential for material savings in...

Taking a study break, I happened to see an article in the Denver Post bringing together two of my favorite clean energy themes: Efficient transport, and wind power. Rail transport has become essential to delivering windpower across the country. The full article is here: Rolling With the Wind.

Tom Konrad I'm more than a little obsessed with finding investments which will increase with the price of oil, but not contribute to global warming.  This is quite tricky, because most forms of renewable energy produce electricity, which we cannot use in our current fleet of cars.  Biofuels ( even cellulosic) can be used in cars, but are limited by supply of feedstock, and by the environmental degradation that growing and collecting biofuel feedstocks can cause.  Not to mention the impact on food prices (despite the fact that this may help poor farmers even as it hurts poor...

Over the weekend, EnergyTechStocks published two articles based on an interview with me. The first was about my conviction that Peak Oil induced rising gas prices is going to lead to a rush into mass transit building by cities, or investing in mode-shifting last September.  I've since written about opportunities in rail transit stocks, (P.TO, TRN, PRPX, and WAB), and more recently Hedging your peak oil risk with your lifestyle.  However, I have been frustrated until now that the only pure play bus stock I've been able to find is Firstgroup PLC (FGP.L, FGROF.PK), the British based owner of...

Investors act in irrational, but predictably irrational, ways.    That is the basic tenet of Behavioral Economics.  (Looking for references, I came across an interesting book by that title, by the Alfred P. Sloan Professor of Behavioral Economics at MIT’s Sloan School of Management.)   For me, these predictable irrationalities provide ways to profit from the mistakes of others in the market, so long as I do not fall into the same (or other) cognitive traps which cause the market opportunities in the first place.  I describe one such technique in this article. Applications to Policy Design In addition to those...

by Tom Konrad Lifestyle Risks from Peak Oil In the US, we all have a large exposure to the risk of rising energy prices.  In addition to the cost of gasoline, the whole US economy runs on oil, so a rise in the oil price is likely to affect our jobs, and the prices of all our assets, including our homes.  If other people have less money to spend and invest because of high oil prices, there will be a fall in demand for anything they were buying or investing in. House prices in exurbs and suburbs where the...

Here is an interesting article on the Carbon Tax Blog about dropping gas usage in the US due to sustained high prices.  As I've said before, now that peaking oil supply has made gasoline supply inelastic, price will have to be set by marginal demand... we're beginning to get a look at what the demand elasticity for gasoline is. But gas prices are not dropping.  US demand may actually be elastic, but world demand is not yet showing elasticity.  In large part, this is because most emerging economies and oil producing company consumers enjoy fixed price oil, courtesy of...

Johnson Controls (NYSE:JCI) has long been one of my favorite energy efficiency picks, with an added bonus coming from their joint venture with Saft to produce batteries for hybrid and electric vehicles.  They have also shown some energy saving innovation making parts for auto interiors. Building EfficiencyEfficient buildings are much more complex than simply replacing inefficient HVAC and lighting with more efficient versions.  Quite often, the most cost effective measures come from using systems more efficiently.  As an analogy to the home, look at any list of quick tips for energy saving around...

Peak oil is likely to have everyone re-examining their transportation options over the next few years.  Rail will likely be one of those options given special attention because rail transportation is inherently much more fuel efficient than road based transport. I first mentioned Trinity Industries (NYSE:TRN) in November as a rail transit related stock.  I didn't give it an in-depth look because rail transit is only a tiny part of its business, but investors interested in the broader rail sector will be very interested. Not only is Trinity focused on the most energy efficient form of land transport, its...

Why is Detroit Obsessed with PHEVs?

Romm v. Kholsa In a persuasive series of articles, entitled "Pragmatists vs. Environmentalists" (Parts I, II, and III) on Gristmill, Vinod Khosla provides the reasoning behind his "dissing" of plug-in hybrids, which drew the ire of Joeseph Romm.  Neither seems to think the argument is settled, and Joeseph Romm returns fire here. As someone who knows as much about investing as Joe Romm and has written as much about Climate Change and Energy Policy as Vinod Khosla, I feel the need to jump into the debate and settle the matter.  (Will either of them will notice?)...

The logic behind Plug-in hybrid vehicles (PHEVs) is that they combine the best characteristics of a Electric Vehicles (EVs), most importantly efficiency, which brings with it much lower operating costs and lower net emissions and no tailpipe emissions, with the benefits of a liquid fuel vehicle, mainly the range available with energy-dense liquid fuels. But how important is range to car buyers?  PHEV advocates say that 80% of all daily car use is less than 50 miles, which is easily achievable with today's electric vehicle (EV) technology.  The freeway-capable EVs being developed today have a range between 100 and...

Investing in Renewable Energy Stocks seldom fails to be exciting, although it can lead to crushing losses as well as mouthwatering gains (Think Ethanol stocks and Thin Film Solar in 2007.)  With this in mind, I usually emphasize that the majority of most investors portfolios should be targeted towards larger, profitable companies, especially those focused on Energy Efficiency rather than the more sexy Renewable Energy technologies.  This is the philosophy behind Alternative Energy Stocks' Blue Chip Portfolio: companies which aren't sexy, but which still are well positioned to take advantage of rising oil prices and increasing efforts to reduce...

Last month, I wrote that investors concerned about peak oil should invest in suppliers of alternatives to driving.  One of the sectors I highlighted was public transit: busses and rail, although I did not provide any stock picks at the time. Here, I will focus just on rail transit.  It's a bit tricky to invest in rail transit systems as they are operated by cities, not by private companies, so I took a step up the value chain and started looking for companies which supply transit operators.  I focused not on rail line operators, but suppliers, since these companies...