MAKING MONEY SAVING THE EARTH

I have often discussed the various actions we can do as individuals to help mitigate global warming. But today I am realizing that I have often left out one thing. Investing. I started investing in alternative energy in a very tentative manner years ago...with mixed success. I had avoided wind and solar because I felt other things looked more promising (e.g. geothermal). Honestly, I seldom put much in and the overall result was so-so.

But recently I have started investing more aggressively in alternative energy stocks, this time primarily wind and solar. I know from my scientific reading that really both are pretty well current technologies, with wind ahead of solar in terms of practicality. But I also figure if we are going to address global warming in the next ten years we had better start treating alternative energy stocks more seriously. Since I started investing in such stocks early this year, I have made LOTS of money on alternative energy. I am proud to say I am profiting off being a part of the solution.

To date when I blog about global warming solutions I focus on compact fluorescent bulbs, purchasing energy from alternative sources, carbon offsets that help build alternative energy infrastructure, and, my main focus this past year, tree planting. (My most recent coverage of all this can be found here for more info). Five years ago my wife and I changed all our bulbs (more or less) to compact fluorescents. The result was immedate: a one third decrease in our energy bill that persisted. Yes, before anyone says it, I know compact fluorescents contain some mercury and we have to consider proper disposal. When you buy them, make sure you investigate where in your area you can dispose of them safely.

Two years ago my wife switched our energy provider (through Con Ed, our power provider) to an all wind power company, making our energy usage, not counting our building's heating, which we have no control over, alternative energy. This costs us about 50 cents per month extra, which is more than worth it.

These two things, combined with the fact that we don't own a car (we use the NYC subways to get everywhere), means it isn't that hard to offset our carbon usage. This year I wanted to plant trees for carbon offset. Depending on the calculation I used (different sites have different, widely divergent, methods of calculating carbon footprint) my family of four only had to plant 6-24 trees to be carbon neutral this year.

So far this year I have planted more than 100 trees, in Kenya, Israel and Palestine (yes...those last two chosen TOGETHER for symbolic reasons). I will probably plant more, so I am offsetting other people's carbon usage as well.

But the other thing I did this year, was invest in alternative energy stocks. This is the result:

A solar stock I invested in has gained more than 250% since I first bought it. Now I bought it three times, sold two of those lots (each time over 100% profit) but continue to hang on to the remaining lot that is, last I looked, almost 270% profit. There are few investments I have made this year that come anywhere close to that! This one started out respectably and has skyrocted to over $100 per share by now.

A wind energy stock I invested in has gained about 70% since I bought it. Quite respectable, but this one is still more speculative than the sepctacular solar stock I have already profited so nicely from.

Another more speculative wind energy stock I bought (one of those dubious "penny stocks") is down around 2% since I first bought it.

Also playing with another penny stock in a wind energy company (don't worry...I don't put a lot into these tiny stocks, mind you) is down around 20% from where I bought it. Well, that's what you get when you play with penny stocks.

However, nother penny stock in a company that does semiconductors and photovoltaics (so isn't strictly a solar company) is up around 20% from where I bought it.

The largest  gainer was the one I picked to put the most money in because it seemed the best investment, so even if all the others tanked completely (which two are certainly not) I would still be way ahead.

I don't recommend stock investing unless you have money to spare. Even good companies can be subject to vagaries of the market that are not rational, so the whole thing winds up being scarcely rational. But I find being rational does mean you pick good stocks more often than not...though I have not always acted on it. (My biggest missed opportunity was ALMOST investing in Entremed, a company I had been watching because I knew the science behind it, the day before it jumped massively...I would have made a fortune had I listened to my instincts!)

And all of the stocks I mention would be considered speculative even by stock invesnting standards. But I think it really important to realize that investing in alternative energy stocks IS a very important way we can help deal with our energy problems and, if done right and with lots of luck, can mean profits, not losses. The amount of money I donated to plant more than 100 trees is a drop in the bucket compared with what I made from investing in these stocks.

Mutual funds are the best way for inexperienced (or even experienced) investors to get into stocks. I once invested in an alternative energy mutual fund but it didn't do so well. But that was many years ago and the performance of such funds seems better now. I have not done much research into such funds, but some of the top ones are the following:

http://www.winslowgreen.com/fund/default.aspx

http://www.powershares.com/products/overview.aspx?ticker=PBW

http://tools.thestreet.com/tsc/quotes.html?pg=mutualfunds&sym=GAAEX

http://tools.thestreet.com/tsc/quotes.html?pg=mutualfunds&symb=NALFX

I cannot outright recommend any of them because, again, i have not done enough research on them. But at first glance they look pretty good and I will be considering investing in them.

Finally, let me add that I cannot know how long these companies will continue to do well (on average). One thing I try to do is cash in my initial investment when a stock does particularly well then hold on to the rest, so any loss is lost profit and any further gains risks no initial principal. Of course this doesn't always work, but overall it has worked well for me.

Investing during the Clinton years allowed me to buy a co-op apartment in Park Slope Brooklyn. Had I waited a mere 6 months longer to buy, rising housing prices and the Bush economy would have made it impossible for me to buy. So the Clinton years did well by me. The Bush years hit us hard (though at least we had bought our home!). I only started making a profit when I started investing in foreign stocks. I did well on that. The only other area I have profited in during the Bush years has been alternative energy stocks. Foreign stocks and alternative energy...the only stocks that did well for me during Bush's presidency.

We have less than ten years...maybe only 5 years, to act to mitigate global warming. We have to do all we can. It feels really good when you can help the world while making some bucks in the process.