Investors want to make money, no surprise there. The greatest returns can many times be found in technology, no surprise there either. What happens when you couple technology with political correctness and government subsidies? Enter CleanTech or Clean Technology, the latest wave in going green.
Could this create a trend worth following?
The safest way to make money is to get onboard a long term trend and hang on until it has run its course. Typically that takes several years. With a good investment trend, you can catch it 20% off the bottom, sell 20% from the top and still make a fortune.
The new wave in green has been accentuated by the election of Barack Obama and the stimulus money that Congress is promising for green technologies, many of which are classified as CleanTech.
If you have not heard of Clean technologies, then you may have heard of Rare Earth Elements, the kinds of ingredients clean alternative technologies use great quantities of. For our purposes today, we will ignore REE’s and just focus on the broader picture.
What kind of technologies specifically are we talking about with CleanTech? One of the best definitions is probably this:
“Alternative energy, more efficient power distribution and new ways to store electricity, all with minimal impact to the environment.”
Consumers in the United States have long had a voracious appetite for energy of all types and even more so now with all of the devices desiring long battery life. Now that appetite is spreading to formerly third world countries in Asia that are suddenly finding themselves affluent enough to afford energy and the products that use it.
Here is where the clean, green part fits in.
Unfortunately, if that energy is produced as it has been for the last century, the environment will suffer. After all, Clinton locked up the cleanest coal in the United States (Utah) a decade ago to help one of his overseas friends. Many powerful governments and people are committed to not letting us produce energy in ways considered “dirty”.
In fact, Obama has been heard threatening to crush the coal industry – and with it all of the coal fired power plants (more than he can replace easily with clean technology, by the way).
Enter the investment potential for CleanTech. When you couple the huge demand for clean energy technology with governments throwing money at it in the way of subsidies and you have companies popping up like dandelions in the Spring trying to capture that money.
Investors, or are they speculators?, are hoping to ride this trend and get rich. But just as we saw with Uranium a couple of years ago, an investment boom can quickly go bust. Many companies were nothing but moose pasture and fancy stock certificates with uranium in the name.
Compound that with the enormous task of wading through hundreds of newly created companies with no real business and it becomes easy for an investor to get burned.
So how can you profit from CleanTech without getting burned?
First, you must understand that many companies will exist in name only; name and your money if you invest. You have to know intimate details about the company claiming to provide clean alternative energy other than just their name.
Second, you will have to keep abreast of the changes in regulations, grants and subsidies that many of these companies will have to operate under and rely upon. This will be an enormous task.
Third, you need to avoid getting squashed by big investment funds that will move in and out of these stocks on a whim, without notice, causing a lot of volatility.
Think you can handle that?
I don’t. Not on my own anyway. Whenever it comes to a complex business such as this I have to rely on investment newsletters who employ professionals dedicated to exactly this type of work.
And even then there are no guarantees.
If you think you can read up on the internet, get some advice from a free blog, then invest with your hard earned money and never get burned I am afraid you have a painful and costly lesson coming your way. I see this happening all of the time and I just shake my head.
Sure you might get lucky the first time or two, markets have a way of sucking you in just like a casino in Vegas or Reno.
Are these technology newsletters expensive? Yes and no. Yes they can cost a lot of money, but if they save you from buying 1000 shares of a $1.00 stock that is headed to zero, then that investment newsletter has just more than paid for itself. The good ones will do that many times over the course of a year.
I think there will be many opportunities to profit from the boom in CleanTech, but I think it will be a path strewn with many landmines.
Avoid the landmines by employing a professional in the field of technology, one who has successfully navigated Silicon Valley for many years.
I subscribe to Casey’s Extraordinary Technology newsletter because Casey Research has directed me to profits in other investment fields, and you will be shocked when you find out who their top expert is. (Click that link and you will get the whole story.)
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