| Hoboken, NJ (June 2008)—Sure, you’d like to | | | | Nevada; Bluglass, an Australian producer of gallium; |
| “go green” in your investments. If you could | | | | Dowa Mining, listed in Japan, it is the world’s |
| find some financially sound options, why not? As | | | | largest producer of Gallium; and AXT INC, a |
| environmental issues have heated up and gained | | | | NASDAQ-listed maker of satellite solar panels, mainly |
| more and more press, you’ve embraced the | | | | producing semiconductor substrates for electronic |
| concept of saving the planet. You’ve changed | | | | and optoelectronic uses.” |
| your light bulbs, strived to live the “reduce, | | | | |
| reuse, and recycle” mantra, and even traded in | | | | “Carbon” trading in the European Union |
| your gas-guzzling SUV for a hybrid. (Well, at least | | | | shows promise. Countries that are part of the Kyoto |
| you’ve considered it!) Problem is, you need to | | | | Protocol have been forced to figure out how to limit |
| feel secure about your retirement years—and the | | | | their carbon emissions without damaging the |
| concept of green investing just seems a little too, | | | | economies in their countries. One way many |
| well, trendy for comfort. | | | | European countries are doing this is through an |
| Jim Mellon and Al Chalabi say such fears are | | | | Emissions Trading Scheme in which each country can |
| unfounded. In fact, the opposite is true. As our | | | | emit one ton of carbon dioxide. The country then |
| planet’s dwindling resources become ever more | | | | assigns permits to their biggest emitters allowing |
| scarce, and the need to find alternate energy | | | | them certain amounts of emissions. Any company |
| sources becomes more pressing, green investing will | | | | not needing its whole allocation is then free to sell |
| start paying off in a big way. Getting in the right | | | | the surplus in the ETS market where the buyers are |
| markets now can help you create a prosperous | | | | typically companies that need more than their |
| future—and in an age where traditional retirement | | | | allocations. |
| avenues are failing, that’s no small feat. | | | | |
| “As baby boomers age and retire and modern | | | | “The idea is that, because there is value to these |
| medicine keeps us all alive longer, the pension plans | | | | permits, companies will be encouraged to invest in |
| set up by corporations and governments are | | | | green technologies, especially as the ‘cap’ on |
| becoming ever more strained,” says Mellon, | | | | total allowable emissions gets progressively lower, |
| coauthor along with Al Chalabi of the new book The | | | | making fewer of the permits available in future |
| Top 10 Investments for the Next 10 Years: BigIdeas, | | | | years,” says Mellon. “The ETS market is |
| MoneyFountains and Your Path to Prosperity (Wiley, | | | | becoming a large and interesting one. Investors may |
| February 2008, ISBN: 978-1-84112-802-3, $29.95). | | | | wish to consider looking at funds that offer an entry |
| “You simply can’t rely on those sources to | | | | to investing in such permits—one such is Climate |
| keep you going when it’s time for you to retire. | | | | Change Capital, listed on the London Stock |
| That’s why it is so important to be a savvy | | | | Exchange.” |
| investor now. And going green with at least some of | | | | |
| your investments is a sure moneymaker.” | | | | Learn more about camelina. Although most “bio |
| The authors explain that, in investment terms, the | | | | fuels”—crop-based fuels—make very little |
| biggest theme of all over the next ten years will be | | | | ecological or financial sense, there is one crop that |
| the broadly defined “green” movement. New | | | | would be worth investors’ keeping an eye on. |
| methods of generating power, conservation | | | | “This crop is ‘camelina,’ which is an |
| measures, and changing fiscal regimes in relation to | | | | interesting low-cost feedstock for biodiesel,” |
| the use of power will create some of the biggest | | | | says Mellon. “It has high energy, is non-food (so |
| global investment opportunities. | | | | that food production is being diverted into energy), |
| “Significant amounts of capital in almost every | | | | uses marginal land that requires no irrigation, is |
| part of the world are already being deployed to take | | | | sustainable, and has a very low cost per liter. There |
| advantage of these trends,” says Mellon. | | | | are no publicly available companies in this space as of |
| “New plants are being built to manufacture | | | | yet, but if you’re interested, keep an eye out |
| photovoltaic cells for solar power projects. Hydrogen | | | | for some of them to pop up. Check out |
| fuel cells are being developed at a rapid rate to a | | | | |
| point near commercialization. And nuclear power | | | | A move away from landfills will be profitable. Another |
| stations are being planned or built in quantity. In | | | | area of potential interest is waste-to-energy |
| addition, wind farms now dot many landscapes. The | | | | systems. Here, the problems from using landfill sites in |
| whole ‘renewables and new energy’ industry | | | | many industrialized countries—including the space |
| is on the cusp of a breathtaking advance.” | | | | constraints and the by-production of dangerous |
| Wondering how you can take advantage of these | | | | methane gas—are opening the doors for a new |
| growing green opportunities? Here are just a few tips | | | | industry to develop. |
| that could help you prosper: | | | | |
| | | | | “The waste-to-energy industry is one that seeks |
| Put your money in renewables. Most developed | | | | to turn waste into energy by burning it, or by using |
| nations are racing to figure out how to make the | | | | the by-product methane gas, which results from |
| move to green energy. From wind farms to tidal and | | | | disposal of any organic waste, to generate heat and |
| wave projects; from waste-to-heat projects to | | | | electricity,” says Mellon. “Companies involved |
| more extensive nuclear generation; with, of course, | | | | in the waste industry worldwide include UK |
| solar power coming up on the rails—the race is on | | | | companies Shanks and Biffa, both listed on the |
| to transform the electrical energy generating | | | | London Stock Exchange. These companies are |
| landscape of the world. | | | | already involved in landfill site management, waste |
| | | | | collection, recycling, and disposal. Another is the |
| “Perhaps the most visible of these initiatives | | | | Japanese company Daiseki, which is that |
| occurs in the form of wind power,” says Mellon. | | | | country’s only nationwide industrial waste |
| “All across Europe, wind farms are sprouting like | | | | operator. Other promising opportunities are with |
| mushrooms. An industry once derided as a novelty is | | | | Séché Environnement in France and Lasila |
| now a multi-billion euro/dollar sector all on its own. But | | | | Tikanoja of Finland, both involved in new recycling |
| beware: If you choose to invest in the wind farm | | | | technologies.” |
| sector, do your research first. This is a | | | | |
| capital-intensive business, subject to a lot of | | | | Energy-saving will help you save in more ways than |
| government interference and scrutiny, and some | | | | one. Within the next few years, energy-saving |
| sophisticated investors have already gotten there | | | | gadgets could be commonplace in all households. |
| first and creamed off some of the good potential | | | | Already people are switching to low-energy lightbulbs, |
| returns.” | | | | and other products are sure to follow. “Imagine |
| | | | | all the computers that are turned on in the world |
| Invest in these conservation companies. Companies | | | | right now,” says Mellon. “How much energy |
| involved in conservation, wind power, and nuclear | | | | would be saved globally if each new PC sold came |
| power are likely to see significant growth in coming | | | | with a fan or cooling device that was just 5 percent |
| years, and that’s good news for the | | | | more efficient? The same goes for TVs, fridges, |
| environment and their investors. One company worth | | | | heaters, air conditioners, etc. With energy-savings, |
| looking into in those areas is Fuel Tech, a US | | | | it’s a numbers game—historically, we |
| company that is working to cut a substantial | | | | haven’t bothered to fine-tune energy |
| percentage of carbon emissions from fuel combustion | | | | consumption of devices because energy supply has |
| units. Or check out Clean Air Power, which is a | | | | not been an issue. But now there are just so many |
| London-listed company working to get trucks to use | | | | devices in every household that it’s really adding |
| natural gas. And, of course, there is nuclear. In this | | | | to the problem. Look for more companies to pop up |
| area investors might want to look at Niger Uranium, a | | | | that will provide energy-saving solutions for the |
| London-listed company exploring for uranium in Africa. | | | | household appliances we use every day.” |
| | | | | |
| “Like any realm of investing, it’s one thing to | | | | Overwhelmed? Invest in an ETF. The sheer volume |
| know the options are out there, and a completely | | | | of opportunities in the green market can be |
| different story knowing exactly which companies to | | | | overwhelming for any investor. Luckily, investors can |
| look into,” says Mellon. “These are all great | | | | take advantage of this market by investing in |
| green options.” | | | | alternative energy in a more general sense through |
| | | | | the Market Vectors Global Alternative Energy ETF, |
| G is for Green…and Germany. Germany is the | | | | which trades in the US under the symbol GEX. The |
| world’s biggest consumer of PV cells—which | | | | holdings of the fund range between 1 and 11 percent. |
| are used to make solar panels—because of the | | | | Before the fund invests, companies must meet the |
| favorable fiscal and monetary regime for solar power | | | | following requirements: 1) Represent the 30 stocks in |
| in that country. Today, the country accounts for half | | | | the Ardour Global IndexSM (composite) with the |
| of all the solar PVs installed in the world. The reason | | | | highest average trading volume and market |
| that the German market is growing so fast is | | | | capitalization, 2) Have a market cap exceeding $100 |
| because of the so-called Feed-in-Tariff. This means | | | | million, 3) Have a three-month trading price greater |
| that anyone connected to the grid (and that includes | | | | than $1.00, 4) Be involved in the business of the |
| private homes) gets a guaranteed payment for | | | | alternative energy industry (i.e., derive over 50 |
| putting green electricity into the grid of about four | | | | percent of total revenues from the industry).You can |
| times the market rate—and that goes for solar | | | | read more about this ETF by visiting |
| PV, wind, or hydroelectricity. | | | | |
| | | | | “It is not for us to judge whether or not we |
| “Germany has been so aggressive in promoting | | | | may all be burnt to cinders by the sun in 30 years or |
| solar power that several world-beating companies | | | | so, unless these developments are successful,” |
| have grown up to satisfy the local—and | | | | says Mellon. “It is enough for us to say only that |
| subsidized—domestic demand,” says Mellon. | | | | these green opportunities are a gold rush at its very |
| “Q-Cells is one example—the company started | | | | earliest stages, and it’s a gold rush that every |
| making PV cells in Germany in 2000 with 19 staff | | | | serious investor should consider. |
| members. Today, it has over 1,500. It exports half of | | | | “That said, investors should remember to always |
| its product and is the world’s second largest | | | | diversify their investments,” he continues. |
| maker of PV cells, after Sharp of Japan. And if | | | | “The green realm is full of promise, but having |
| you’re looking to invest, the company might be | | | | too many eggs in one basket always carries risks. |
| good place to start.” | | | | There are other great opportunities out there with |
| | | | | real estate, commodities, and more. To ensure your |
| Invest in the elements. Big money is in investing in | | | | investments have made the most for you over the |
| the extractive industries, which mine the key | | | | next ten years, you’ll want to check those out |
| components of solar panels. Gallium, indium, | | | | as well.” |
| germanium, and other materials are vital to the PV | | | | # # # |
| story, and the companies that mine and extract | | | | About the Book: |
| these components are a great place to invest your | | | | |
| money. | | | | The Top 10 Investments for the Next 10 Years: |
| | | | | BigIdeas, MoneyFountains and Your Path to |
| “Jellon Limited is doing it,” says Mellon. | | | | Prosperity (Wiley, February 2008, ISBN: |
| “Other promising options include: Recyclex, a | | | | 978-1-84112-802-3, $29.95) is available at bookstores |
| French company producing gallium amongst other | | | | nationwide, from major online booksellers, and direct |
| metals; New Jersey Mining Company, which produces | | | | from the publisher by calling 800-225-5945. In Canada, |
| gallium from mining operations in Idaho; Gold Canyon | | | | call 800-567-4797. |
| Resources, which has prospective gallium deposits in | | | | |