Tom Konrad, Ph.D., CFA
I first met David Gold when he agreed (at the last minute) to sit on a lunchtime panel about Financing Renewable Energy I organized for the Colorado CFA Society in April. When he emailed an announcement in September that he was starting Green Gold Blog, I immediately signed up, because I expected he’d have something interesting to say.
I also know that what’s relevant for Venture Capitalists is often relevant for public investors. For instance, doesn’t his recent article on VC cleantech investment trends have some almost eerie similarities to my article about why small investors by solar stocks? And both have similar lessons for investors: there’s probably a lot of opportunity that others are not looking at because they either don’t have the right background or perspective to see the opportunities.
I put together a quick graph showing the Venture Capital (VC) investment numbers from David’s article, and compared them with the numbers of public companies on our corresponding stock lists.
The parallel is very tight except in Geothermal and Energy Efficiency. And I think the parallels would be a lot closer if not for the fact that I and AltEnergyStocks’ Editor Charles Morand share an interest in Geothermal, and it’s fair to say that I’m obsessed with Energy Efficiency as an investment theme. In other words, the length of our geothermal and energy efficiency stocks lists probably has more to do with our interests than the number of companies out there.
The question David and I are both asking is this: Does the size of current investment in Cleantech/Green Energy sectors relate more to the size of the opportunity, or more to the predilections of the investors?
I hope readers find David’s articles as engaging and provocative as I do, and that you look forward with me to more. We expect to publish something from David about twice a month going forward.
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Welcome to Mr. Gold! I look forward to learning from him.
I noticed that he seemed to fully agree with your conclusions, Tom, about the potential of Geothermal. His emphasis on the people behind a venture makes me wonder about the leadership of firms highlighted on this blog, such as New Flyer and Ormat.
Leadership is important, and especially so the smaller and less profitable the company is. VC firms invest in startups that often have less than 20 employees, so the people they do have are absolutely critical.
When I read David’s article about people, it made me think I should be paying more attention to this elusive quality, but the places where it matters most will be the microcaps, like the geothermal companies OTHER than Ormat.
I have not looked at Ormat’s management at all, but my impression of New Flyer is that they’re extremely sophisticated in terms of financial management… skills necessary to run a business like New Flyer, less so for a startup.
Hi from France,
I think that efficiency stocks can be a very interesting investment…even ‘boring’ companies that develop or sell insulation for example.
Wave power is also very interesting. Oceans hold a huge amount of energy.
I see many of the benefits of solar or wind going to mainstream utilities. One imagines that many speculators have seen the discount that many solar stocks are currently selling at compared to all time highs…and are salivating with thoughts of returning to those levels. (i.e. Solon or MEMC).
This is a fantastic website and a great resource. Many thanks for sharing your research.