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Green Stocks Mean Big Profits for You! (Part 1)

19 November 2007 - Features - Editor

Celebrities win profitable stocks eve without asking, in return for supporting environmental protection causes. They can use the proceeds to further their social aims, and feather nests of retirement at the same time! The most sullied politician can win instant plaudits for expressing concerns over the future of the planet. There are many quarters in the profit-making and commercial worlds that are happy to support influential people for speaking out in favor of populist issues. However, the financial and material benefits of lending shoulders to green movements are secular. They are available to all stakeholders.

It is profitable for corporations to be environment friendly. Technological barriers, branding, and cost effectiveness are the three main axes on which companies can build competitive advantages and entry barriers. It follows that stocks of enterprises that can leverage conservation for better business results, have additional gains for today’s investors. Automobile manufacturers that cannot control emissions from their engines must shut shop. Increasing numbers of consumers transfer custom to companies which have reputations for respecting nature. Waste reduction has an inbuilt cost advantage. Green movements are not business-friendly, but environment consciousness has clear commercial benefits!

Stocks with Unlimited Ingredients

Current trends in green thinking have important bearings on how investors should evaluate stocks. Any industry based on unlimited resources should be viewed as more valuable than the last quarter’s earnings may indicate. Wind energy in India is an example of how a green business can record competitive results towards its stocks. However, not all companies involved in alternate forms of energy are able to match the business results of established stocks. Some of them continue to be in the development phases of cycles, and deserve patience from investors. One can discern that many of them achieve significant breakthroughs in terms of new and prestigious customers, even though they may temporarily lack critical masses of revenues.

Tidal energy is another resource without any natural limits. Technically, it is possible to cut harmful emissions in the course of energy generation almost completely. Old business models need to adapt to new realities, so that investors can earn returns from stocks in such lines of business. Distribution serves as a common bottleneck because established chains have axes to grind in keeping the fossil fuel system going. However, these obstacles are bound to crumble in time. Investors without stocks in sectors of clean energy generation are at risk of losing out on precious earning opportunities.

Stocks with Planned Replenishment

All industrial and commercial activities cannot depend on unlimited materials as starting materials. Management after all, is primarily about stewardship of limited resources. The best executives are the ones who have foresight to plan for the timely replenishment of critical materials. Some members of the paper industry are good examples of this approach. Rearing animals for meat and for products such as leather are fairly basic examples of how enterprises can provide for their long term survivals. All companies that take effective and transparent steps to ensure the continued supply of materials which are central to their profits, deserve investor support for their stocks. The paper industry is a rather dramatic example of this approach: other cases may be more subtle. You may trade in stocks for rapid gains at times, but the real blue chips are ones from which your inheritors can also look forward to earnings!

Green Stocks Mean Big Profits for You! (Part 2)

 


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