Friday, 18 June 2010

Let's check on our "Green" investments

Time for another quick check on how our HSBC (and Kate MacKenzie at the FT) recommended investment strategy is getting on.

For those who don't remember, the hypothesis was that windmills and solar panels and other industries that will help fight climate change and herald a new era of free energy and love and peace and milk and honey for all (or some such drivel) were a fantastic investment opportunity that had been hamstrung recently by lies and intimidation from dastardly "Climate Change Deniers" [cue evil music]. But now that the the institution of climate change hysteria was getting a clean bill of health from many "independent inquiries", such speed bumps were passed and we were all set to get massively rich.

My hypothesis was slightly more prosaic. Dangerous Human Caused Climate Change is bunk of the highest order. The "alternative energy" industry in all its guises was a subsidy farming scam - fuelled by stupid and duplicitous politicians taking money from people who earned it and giving it to sleazy entrepreneurs with low morals. And now that the public subsidy well is running dry with massive public deficits, the economics of these industries (pouring taxpayers' money into industries that have no economic rationale on their own) will inevitably collapse. My hypothesis suggests investors are best to remain out of these industries (at least until you think they will have the ability to steal more taxpayers money).

The latest results are now in for May . I know this is a short period and returns are noisy, but it still looks like the FT and/or HSBC would be better off simply reprinting this blog (hell, they can have it for free) rather than continue to pay the salaries of Kate MacKenzie and whoever is pumping out their "Green" research.

Total returns on the HSBC Climate Change Index were 12.5% less than broad Global Equities. over the last 12 months and 7.2% less in the year to date (so under performance accelerated). [the red line is the Climate Change Index returns and the green one is for Global Equities]

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