the obama effect
November 24th 2008 03:09
The Obama effect: why his win is a victory for ”clean-chip” companies
Climate-friendly goods and services, once deemed luxuries, are set to become the most economic options for consumers in a world increasingly focused on renewable energy.
Take for example, electric cars. Once deemed a luxury item, sales of these cars are set to outpace uptake of mobile phone technology. As prices naturally come down, the cleaner transport alternative will become the cheaper one for consumers.
The election of Barack Obama as the United State’s 44th President will drive this more concerted shift to climate change. His government has committed to using the transition to a low-carbon economy as a cornerstone of his country’s economic recovery plan.
Companies working to provide energy efficient services, renewable energy solutions and energy technology will directly benefit from the range of climate-change and alternative-energy policies the Obama campaign promised in the lead up to last Tuesday’s election.
These policies, which include making the US a leader on climate change and creating jobs in the clean energy field, will underpin growth in the sector.
And companies which work in that finite investment universe within the sector can be easily identified. arkx Investment Management has indentified seven major global themes and 34 companies that will benefit from the transition to a low carbon economy. The entire investment universe in that space includes about 550 stocks with a market capitalisation of $500 billion.
With market volatility close to all time highs, investors are seeking safe havens. arkx believes climate change and the subsequent transition to a low carbon economy will be the source of identifiable investment outperformance for many years to come.
"The current economic downturn presents governments with an historic opportunity to climate proof their economies as they upgrade infrastructure as a core response to the economic downturn," writes Mark Fulton, global head of climate change investment research for Deutsche Asset Management.
The Obama victory may provide the turning point for awareness on this issue. For years now America has been the laggard on the global transition to a low carbon economy. Now it is on board, we believe this transition will take place far more quickly than anyone expects.
Very soon it will make no sense to buy polluting goods, they will be more expensive. Likewise it will make no sense to invest in high polluting companies as the price of polluting becomes a larger burden on balance sheets, forcing behavioural change. It will soon be perceived as a breach of fiduciary duty not to be aware of the carbon footprint of your investment portfolio or make investment decisions without considering the current transition to a low carbon economy.
The world is in the process of an economic revolution that will be accelerated by the global financial meltdown as governments turn to investment in alternative energy and energy efficiency solutions to help navigate their economies out of turmoil. Obama is just one example of this global theme: 69 countries have mandated renewable energy targets. The US takes that number to 70.
So what stocks should you be buying? Here are some companies that we at arkx believe will be direct winners from the transition to a low carbon economy.
1) BYD , Johnson controls and Saft – producers of batteries and a manufacture of parts for electric cars at various points in the manufacturing chain.
2) Sunpower – US base Solar power supplier.
3) Energy Conversion devices and Carmannah Holdings – Provide energy efficiency solutions to U.S companies.
Hollywood has made the butterfly effect a cliché. The butterfly effect is part of chaos theory, and pertains that a butterfly flapping its wings in one part of the world could dramatically affect events in another seemingly unrelated part of the world, such as preventing or causing a tornado. We at arkx investment management believe the Obama effect in the low carbon space will have similar, positive reverberations throughout our investment universe.
For details on Obama'a clean-tech policies CLICK HERE
Climate-friendly goods and services, once deemed luxuries, are set to become the most economic options for consumers in a world increasingly focused on renewable energy.
Take for example, electric cars. Once deemed a luxury item, sales of these cars are set to outpace uptake of mobile phone technology. As prices naturally come down, the cleaner transport alternative will become the cheaper one for consumers.
The election of Barack Obama as the United State’s 44th President will drive this more concerted shift to climate change. His government has committed to using the transition to a low-carbon economy as a cornerstone of his country’s economic recovery plan.
Companies working to provide energy efficient services, renewable energy solutions and energy technology will directly benefit from the range of climate-change and alternative-energy policies the Obama campaign promised in the lead up to last Tuesday’s election.
These policies, which include making the US a leader on climate change and creating jobs in the clean energy field, will underpin growth in the sector.
And companies which work in that finite investment universe within the sector can be easily identified. arkx Investment Management has indentified seven major global themes and 34 companies that will benefit from the transition to a low carbon economy. The entire investment universe in that space includes about 550 stocks with a market capitalisation of $500 billion.
With market volatility close to all time highs, investors are seeking safe havens. arkx believes climate change and the subsequent transition to a low carbon economy will be the source of identifiable investment outperformance for many years to come.
"The current economic downturn presents governments with an historic opportunity to climate proof their economies as they upgrade infrastructure as a core response to the economic downturn," writes Mark Fulton, global head of climate change investment research for Deutsche Asset Management.
The Obama victory may provide the turning point for awareness on this issue. For years now America has been the laggard on the global transition to a low carbon economy. Now it is on board, we believe this transition will take place far more quickly than anyone expects.
Very soon it will make no sense to buy polluting goods, they will be more expensive. Likewise it will make no sense to invest in high polluting companies as the price of polluting becomes a larger burden on balance sheets, forcing behavioural change. It will soon be perceived as a breach of fiduciary duty not to be aware of the carbon footprint of your investment portfolio or make investment decisions without considering the current transition to a low carbon economy.
The world is in the process of an economic revolution that will be accelerated by the global financial meltdown as governments turn to investment in alternative energy and energy efficiency solutions to help navigate their economies out of turmoil. Obama is just one example of this global theme: 69 countries have mandated renewable energy targets. The US takes that number to 70.
So what stocks should you be buying? Here are some companies that we at arkx believe will be direct winners from the transition to a low carbon economy.
1) BYD , Johnson controls and Saft – producers of batteries and a manufacture of parts for electric cars at various points in the manufacturing chain.
2) Sunpower – US base Solar power supplier.
3) Energy Conversion devices and Carmannah Holdings – Provide energy efficiency solutions to U.S companies.
Hollywood has made the butterfly effect a cliché. The butterfly effect is part of chaos theory, and pertains that a butterfly flapping its wings in one part of the world could dramatically affect events in another seemingly unrelated part of the world, such as preventing or causing a tornado. We at arkx investment management believe the Obama effect in the low carbon space will have similar, positive reverberations throughout our investment universe.
For details on Obama'a clean-tech policies CLICK HERE
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