Publisher’s Note: Welcome to Cabot Wealth Advisory Weekend Digest, which will be coming to you every Saturday afternoon and will be written by Cabot Wealth Advisory editor Elyse Andrews. Elyse will bring you a different perspective on the market and investing (as she comes from a journalism background), and she will update you on the week’s Cabot Wealth Advisory issues that you might have missed. Please feel free to send feedback via email or the Cabot Forum. Enjoy!
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Clorox Goes Green?
Recently, The New York Times published a special section called the “Business of Green,” detailing the rise of “Green collar” jobs, Green construction and Green products.
These days it seems everyone is going Green, even Clorox. Yes, that’s right, the Sierra Club is endorsing the maker of bleach, the harsh chemical that is only to be used in well-ventilated areas. It appears that Clorox is capitalizing on the Green bandwagon with its new Green Works product line, which contains chemicals primarily from plant sources. The revelation has been greeted with skepticism by consumers (and yours truly).
Honestly, what will they think of next?
The Sierra Club says it’s endorsing the product line because many consumers resist buying Green cleaning products because they fear the natural ingredients will not work as well as traditional cleaners, and thus are unlikely to give it a try. The endorsement means that Clorox gets some of the Green market share while the Sierra Club associates itself with a well-known brand in the hope that more consumers will switch to Green cleaning products. This is the first time the Sierra Club has endorsed a product in its 166-year history. Not surprisingly, the group will get a portion of the proceeds.
All in all, I guess we all win when people use Green cleaning products. Consumers win because there are more options for them now that big name companies such as Clorox are getting in on the game; investors win because it opens up a new Green market that’s sure to bring big growth and the earth wins because we stop dumping corrosive, caustic chemicals down the drain every time we clean the bathroom.
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“Green Collar” Jobs
Another curious article in the Times section was about the rise of “Green collar” jobs. These are jobs involving Green products or services in some way, such as installing solar panels, building hybrid cars or brewing biofuels (or even making Clorox’s Green Works products). The intriguing concept is that these jobs will replace many of the blue-collar jobs of the past, many of which have been shipped overseas.
But these are blue-collar jobs with a twist. Instead of mining iron ore to make steel that will be used in low-efficiency automobiles, the iron ore will be turned into steel that will be used to make products such as wind turbines, according to the Times. This is bringing labor unions and environmentalists together across the country ... a feat no one thought was possible a few years ago.
But how significant are the numbers here? Are there actually enough jobs to replace the ones lost to cheap labor overseas? Is this just something for politicians to blather on about while we see no real world application?
There’s no doubt that the demand for Green products and services is increasing as people become aware of the current and impending environmental crisis. As more and more states pass regulations about how much energy must come from Green sources, there will be an increasing need for “Green collar” jobs to make solar panels and wind turbines, as well as install them and run them.
Another place “Green collar” jobs will likely show up is in the housing sector.
Green Building Sector
While most of the housing market still is suffering, there is one segment that seems to be gaining steam, or at least a lot of media attention: the Green sector. All across the country as people are building new homes, or renovating old ones, they are installing solar panels on roofs, reusing building materials and using more energy-efficient systems to heat and cool their houses.
The epitome of this Green revolution in housing is a new home built in a Boulder, Colorado, suburb that was dubbed Solar Harvest by its owners. It has huge solar panels on the roof, faces south to take advantage of the sun and has super-insulated windows.
This is all well and good, but the builders (who are also the owners) estimated that using environmentally friendly building practices cost a significant amount more than traditional building practices. The super-insulated windows and electric solar panels added 8% to the cost. The total cost for the land and construction was $1.38 million, placing it far out of reach for most Americans. And during a particularly cold winter the solar heating system proved inadequate, forcing the owners to install backup electric heat.
On the pro side, the house fed enough power into the local grid to offset all the power it used at other times. That’s impressive.
It’s clear that all the kinks haven’t been worked out of the Green building sector, but as the demand for environmentally friendly houses grows, solutions are being tested constantly. As people’s budgets tighten because of the rising cost of food and fuel, they will look for other ways to save some money while going Green. Environmentally sound homes, while having bigger upfront costs, can definitely help save money in the long run.
In the end, it’s clear that the Green movement is not a short-term fad, but rather a powerful, long-term trend. From “Green collar” jobs to a house called Solar Harvest, people are hungry for environmentally sound products and services. This bodes well for the companies in this sector, and for investors seeking hot new sectors to invest in.
Solar power stocks were hot in 2007, but most of the market hasn’t even been tapped in this area, which means that great growth is still in the future. With the stock market correction behind us, and the new upswing gaining steam, I’ll be watching great Green stocks closely.
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In case you didn’t get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, we have links below to each issue.
Cabot Wealth Advisory 3/28/08 - The Law of Unintended Consequences
In Monday’s issue of Cabot Wealth Advisory, Paul Goodwin discussed how the increase in corn production to be used for ethanol as a gasoline additive has caused the price of fertilizer to spike. Paul also found a high-tech company that had its IPO in late 2007, and he advised aggressive investors to keep their eyes on it. Stock featured in this issue: Rubicon Technology (RBCN). Click the link below to read the full issue.
http://www.cabot.net/Issues/CWA/Archives/2008/04/LUC.aspx
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Cabot Wealth Advisory 5/1/08 - The Best Prison Stock in America
In Thursday’s issue of Cabot Wealth Advisory, Timothy Lutts details his recent visit to San Francisco that included a tour of Alcatraz. His trip inspired him to seek out relevant investment opportunities, and he found a privatized prison company that looks like a good investment. Stock featured in this issue: Corrections Corporation of America (CWX). Click the link below to read the full issue.
http://www.cabot.net/Issues/CWA/Archives/2008/04/Trip-to-Alcatraz.aspx
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Book of the Week: “How to Trade in Stocks” by Jesse L. Livermore
Market legend Jesse L. Livermore wrote “How to Trade in Stocks” shortly before his death in 1940. In the book, the famously tight-lipped investor gave detailed guidance on reading the market and stock behaviors, analyzing leading sectors, market timing, money management and emotional control.
Michael Cintolo mentioned this week’s book in the March 29 issue of Cabot Wealth Advisory. Mike wrote, “In his book, ‘How to Trade in Stocks,’ Jesse L. Livermore said there are just a handful of times each year when he would be active-near the intermediate-term turning points in the market. Other than that, he let his account sit idle, making sure he didn’t lose money, preparing for the big swing when the market changed course.”
Sounds like good advice for today.
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Have a great weekend. We’ll be back with you on Monday!
Until next time,
Elyse Andrews
Editor, Cabot Wealth Advisory
P.S. Cabot Green Investor is a guide to earth-friendly investments in the sector that offers the most opportunity since the Internet boom of the 1990s. It’s Cabot’s newest newsletter, the first issue was in January, so it doesn’t have a track record yet, but the potential is huge. And the recommended stocks meet all of the criteria of Cabot’s time-tested growth investment strategy. Click the link below to find out how you can diversify your portfolio while helping the earth.
http://www.cabot.net/info/cgi/cgiii02.aspx?source=wc02
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