Tuesday, February 27, 2007

An inconvenient investment

Via J F Beck, I see a summary of the green energy investment world. After a very strong year or two, problems are developing:

Some solar-energy companies have slid because of their inability to turn a profit even as demand increases. Marlboro, Massachusetts-based Evergreen Solar Inc. said this month that its fourth-quarter loss was $5.5 million, wider than a year ago, as revenue almost tripled. The stock had the biggest decline in seven months after the results were announced.

Alternative energy ``is all the rage,'' said Stuart Schweitzer, New York-based global strategist at JPMorgan Asset Management, which oversees about $1 trillion. ``That does not mean that as an investor you'll be able to make money.''
And it could get worse:
D.E. Shaw & Co., Tudor Investment Corp., Citadel Investment Group LLC, Caxton Associates LLC, SAC Capital Advisors LLC and Pequot Capital Management Inc. reduced their stakes in solar- power and ethanol producers in the fourth quarter, according to filings with the U.S. Securities and Exchange Commission. The hedge funds manage about $86 billion.

``As an investment play,'' global warming is ``a bubble'' and ``social short-term craze,'' said Ken Fisher, who oversees $35 billion as chairman of Fisher Investments Inc. in Woodside, California.

Anyone looking for corroboration of that assessment may find it in the so-called short selling of U.S. alternative-energy stocks last month, which climbed 45 times faster than the average for Standard & Poor's 500 Index members.

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