Posts filed under “Investing”
A new Mercer research report, “Investing in a Time of Climate Change,” is fascinating for what it is (and isn’t): a pure investment thesis, not a screed on science or politics.
The report is especially timely, given a new National Oceanic and Atmospheric Administration report showing the so-called global-warming hiatus was the result of an error in measuring ocean temperatures. There has been no slowdown in warming, according to the latest data.
I don’t want to debate the science, but rather to focus on the investment risks the report discusses. As we have noted before, this is a question of industry market share, corporate profits and investment performance – not science.
In the real world, climate-change deniers are and will be giant money losers.
I expect those who suffer from cognitive dissonance over whether global warming is real will soon be greeted by a brutal Darwinian result in the markets. I don’t make many forecasts but here is one: It is only a matter of time before the deniers exist only in think tanks funded by the fossil energy industry and oddball conspiracy groups.
The report identified four climate scenarios and four climate risk factors, each of which has differing “impacts on returns for portfolios, asset classes, and industry sectors between 2015 and 2050.”
The three broad conclusions of the report are . . .
Continues here: Even Skeptics Can Profit From Climate Change
About a year ago, we discussed what happens “When Correlations Lie.” Delving into the classic logical fallacy that correlation implies causation, we looked at equities and a variety of supposedly related factors, including gross domestic product, rising interest rates, earnings surprises, new financial products and the “death cross” involving daily moving averages. All were classic coincidences of…Read More
My Sunday Washington Post Business Section column is out. This morning, we look at what you can do — right now — to get yourself prepared for stormy weather in the markets. The print version had the full headline The sun is shining on portfolios, but winter is coming, while the online version was Your portfolio may…Read More
Summertime is here. The days are still getting longer, the kids will soon be in camp, the beach beckons. With Memorial Day behind us, we have 12 weeks before Labor Day sneaks up on us. My goal each year is to read three books a month between the holidays that mark the unofficial start and…Read More
Every now and again, I disagree with an article written by someone I like and respect. On occasion, an author will crank out a column that makes me angry. And on rare occasions, I will read something where I disagree with just about every sentence. Today is one of those total disagreement days. Marketwatch columnist Paul Farrell…Read More
Relative to this morning’s column, consider this discussion about inflation and valuation: From Savita Subramanian: Inflation: The level of inflation also matters, and historically has had a strong relationship with PE multiples. Chart 2 below indicates that the relationship may not be linear, but many have simplified this relationship to the “Rule of 21”…Read More
Traders returning to their desks after the long holiday weekend will be greeted by the continuing Greek saga, a guessing game about when the Federal Reserve will raise rates and a megamerger in the cable industry. But the debate I am much more interested in is the one taking place about U.S. stock valuations. It is…Read More
I love this debate between the idea of Tobin’s Q-Ratio as th be all for valuation analysis. It is embodied between Smithers & Co. quoted in this scary BBRG article and Pragmatic Capitalism’s Cullen Roche. Here is PragCap: “Better yet, look at the number of times this ratio has been cited during the most recent bull market…Read More