I am Chris Outwater, a proud member of “thebullbear”, and I just returned from the preliminary session of the GreenTechConnectForum in Pasadena. Steven asked me to write a few words for a GreenTech bubble blog. So, here it goes:
The goal of the forum and conference is to educate people about the Green industry and also to introduce Green entrepreneurs to potential investors.
The two hour session was filled with very good, although somewhat standardized, information for 100 or so entrepreneurs at the session eager to find funding for their projects.
We at “thebullbear” would be most interested in any smaller public companies that might be represented at the forum in hopes of finding that 20 or 30 bagger hiding in the wings of the green tech bubble. The Angels and VC’s and private capital are looking for similar target companies, but most likely those companies are still private.
So, “Green” remains a great story. I have not seen any posters yet that say, “Go Green or Go Home,” but I am sure they are on the drawing boards. And, as with any good story that might attract investment and speculation, you need a simple yet powerful premise. My personal overarching premise is that the recovery act and the jaw-dropping economic stimulus we are currently witnessing will create the groundwork for several Green technology bubbles, some on the renewable energy side, some on the electric vehicle side—witness recent Buffett news with his China car company, and some on the electric infrastructure side.
I also learned today what I had suspected---that the govn’t stimulus money is more than making up for the fall off in private capital in this g reen arena. The fall off has been 100B and the Gov is promising 200B before the final curtain falls. I hope it keeps coming.. I personally am consulting for and working with 3 different companies, all of them filing grants---one for a hybrid powertrain, another for electrifying refrigerator trucks, and one infrastructure play for plug in electric vehicle (PEV) plug in stations. This is how I learned of this particular event.
The Gov is creating a sea change in major industries such as utilities and vehicle manufacturing and the lighting industry, to name a few, by virtue of the Energy Climate Bill and the fact that everyone now believes that one way or the other government will monetize carbon.
Somehow the ideas of getting off the ugly habit of consuming foreign oil and stimulating homegrown energy sources and re-stoking the fires of American innovation and technology have blended into this inchoat e maelstrom of energy and investment that underpins a bubble. One could probably draw a graph of the growth of the number and attendance of green tech industry trade shows and conferences as industry bubble leading indicators. I am old enough to remember the tingle of anticipation as the personal computer bubble began to inflate when Atari and Commador and Apple were duelling it out while the Internet was still just a sparkle in DARPA’s eye. There are innumerable examples and the same sort of psychology plays a role. And, if you are a speculator and not an investor even missing the long term winner is not as important as making an educated decision and buying into a company that appears to be riding the wave of techno and market enthusiasm. Even if the company is not around in two years, you could still enjoy the “lightness of being” that comes with the expansive environment of the bubble psychology.
If you are a long term investor, (are there any left out there?) your job is a bit more difficult. And yet money can be made. You might look at Ford. There has already been a big move up since March, but they are a survivor. They are a grant recipient. They have critical mass and credible management. I feel Ford could make a steady upward move over the next few months as they ride the bubble. And yet, that is not the major 20-40X move that one could ride, if speculating on the right, (emphasis on right) start up or micro cap company that is just paddling to catch the wave, even if in a smaller niche area of interest.
In today’s crazy market, driven increasingly by government intervention, it is more difficult to be a long term, buy and hold, investor. We are on a roller coaster in which politics plays a huge role.
Discretionary investing involves very hard work as you dig through the marketing hype and fi nd which companies actually have valuable, innovative technology and the management to carry it forward in the long term.
Discretionary speculating is sifting through the marketing hype and deciding who has the best hype for the moment, whether it is putting people back to work, utilizing unused factories, or keeping carbon out of our environment. As time permits, we will attempt to help find the “right” companies, if any, to ride this bubble.