If you choose the former, you probably like all the pretty pictures of windmills and solar panels featured so prominently in so many television commercials about green energy. Maybe you own a few shares of the company that makes Ed Begley Jr.’s solar-powered toaster.
No amount of subsidies or green happy talk can change this fact: Energy from solar still costs 22 cents a kilowatt hour. Coal costs 6 cents.
Prospects are not profits. Talking is not doing. Betting on prospects is gambling. Betting on performance is investing.
Little noted in the green frenzy of the last few years are the companies that drill, pump or mine for oil, natural gas or coal: They are making money. They never stopped – even during the financial tsunami. Their stocks reflect that.
What they say is not that sexy. What they do is. CSX makes money running railroads. Its stock is up 40 percent in three years. Caterpillar makes money building trucks. Its stock is up 50 percent in three years. Golar makes money carrying liquefied natural gas. Its stock is up 55 percent in three years.
And they are doing so despite one of the most challenging regulatory environments any business can imagine.
Now compare that to two alternative energy funds that are investing in the best of the best: TAN and FAN. They went public three years ago and have since gone down 30 percent and 27 percent, respectively. While the market in the same period is down 1 percent.
It is not in the least political to say our leaders in Washington are losing their appetite for – and ability to – heap subsidies on expensive energy while ignoring abundant domestic supplies – like good, old-fashioned L.A. black gold – in times of record scarcity.
Already, some big funds are getting out of green energy because investors want something that actually makes money.
So should you.
Bill Gunderson owns Gunderson Capital Management in Oceanside. He also hosts a show on KCEO-AM (1000) about investing and is the author of “The Best Stocks Now!”
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