Why invest in "green" companies?

I feel quite strongly that we all need to be conscious of how we treat the planet we call home. Pollution is making breathing the air and drinking the water dangerous to our health. Modern “big agriculture”, using antibiotics and hormones as staple ingredients of animal feed, has made eating a pork chop or a chicken breast the equivalent of taking a prescription drug(no prescription needed). The systematic use of chemical fertilizers and pesticides in the fields has done the same for commercial vegetable and grain crops. All of these chemicals, along with all of the OTC and prescription drugs and vitamins that pass through everyone’s toilets, go on to become part of our drinking water supply.

This is why I think it is important for everyone who invests in the stock market to take a long, hard look at “green” investing. Companies that are trying to minimize the damage done to the earth deserve to be supported. It is not a hardship: there are thousands of publicly trades companies on the U.S. stock exchanges involved in the “green” movement. Plenty of diversity can found and more companies are turning up every day.

I take a fairly wide-angle view of what is “green”. My current watch list of companies that I will invest in numbers slightly over 200 and grows daily as I discover new opportunities. Industries on my list include: batteries, solar energy, wind energy, geothermal energy, water power, wave power, electric vehicles, fuel cells, kinetic energy storage(flywheels), smart grid, LED lighting, rare earth mineral mining(necessary for semiconductors), wireless network & storage(necessary to smart grid), water treatment/recovery/efficiency, ocean transport(more efficient than flying), organic/sustainable agriculture, green packaging and a few more. There are also many tech companies that supply needed components to solar, wind, water and other industries. I also list cleaner, more efficient current technologies such as internal combustion engines designed to run on natural gas or natural gas turbine engines designed for vehicle use.

Many of these “green” technologies have been lagging the general stock market. This is not because the companies involved have bad management, or lack sales revenues or solid profits, or do not have ample opportunity for future expansion. The reason their stock prices are lagging is because people do not yet believe in them enough to put their money into company stock. This needs to change. If we believe in the products we need to believe in the companies making the products.

The situation seems to just be reaching a tipping point. As word of China’s stranglehold on rare-earth mineral production reaches a greater audience, previously little-known companies like Avalon Rare Metal Inc. and Great Western Minerals Group are seeing more interest and slow, steady share price increases. A123 Systems Inc., a maker of lithium-ion rechargeable batteries, announced the opening of a new production plant in Livonia, Michigan dedicated to batteries for electric vehicles and the $7.36/share stock shot up $0.65/share in one day. When Westport Innovations, designers of natural gas conversions for commercial diesel engines, signed a partnership agreement with Cummins to build heavy truck and equipment engines their shares saw a substantial and maintained price increase.

“Green” companies are the wave of the future. The writing is on the wall and there is really no choice. Companies like Walmart are using hydrogen and fuel cell fork lifts and more-efficient semi’s and Frito Lay is using an electric truck delivery fleet in New York City and the U.S. military is installing solar and wind power on its bases. The only real question is: how long will you wait before investing in these companies? Why not get in now while there is maximum upside and the support will make a real difference to the company? I invest every dollar with the intention of that dollar making me more money and it is certainly possible to do that within the “green” sphere of companies.

Enjoying getting back into practice

For the past week I have been doing my own rehab work on a real estate investment property. It just had too many cosmetic and minor electrical issues for most buyers. The obvious electrical issues were switch and receptacle boxes recessed behind newer drywall so that it was impossible to attach cover plates and a few lights that were slow to come on when the switch was thrown. Cosmetic issues were ugly drywall taping, no or poorly installed trim, poorly installed carpeting and a really ugly drop ceiling in the kitchen.

It has been almost ten years since I have done any real construction work but I wanted to tackle as much of this project as possible myself to keep expenses down and try to salvage a small profit. I started with the best bedroom which needed mostly drywall touch-up: replacing/repairing poorly taped seems, filling nail holes, fixing receptacle/switch boxes and building a proper cover for the main breaker box. That room is nearly ready for paint.

Every remodel I have ever done has revealed many more problems as the job progressed. I had planned to simply frame and drywall a new kitchen ceiling below what was there and drop the existing fixtures down. The wiring was a mess and the ceiling was not level, so the drop ceiling had to be removed and new wiring and fixtures installed. A problem was found in the wall of one corner and the paneling cannot be matched so a built-in cabinet is now going to cover that area. The wall behind the range and sink were not finished, with exposed wiring and plumbing. Those need to be pulled out, the area finished properly and the fixtures reinstalled.

One of the bedrooms was going to need drywall seams re-taped. Then it was discovered that the joints were cracked because the walls were water-damaged plywood over an aluminum screen-room frame. Those walls are currently being removed and will be properly re-framed, insulated and drywalled. A closet will also be added, which will hide an original exterior window in the wall between the bedroom and the living room.

Yes this was an odd house. A lot of so-so work was done by the original owners over the course of nearly 30 years. But it will soon be a nice, freshly painted home for less than $3,000 of materials and a few weeks of work. And I have really been enjoying getting back into practice with a hammer, screwdriver, multi-meter and drywall knife. It is hot and dusty but also very satisfying work where you can see your progress at the end of every day.