One More on Ecology

The past couple of weeks have dealt on topics that are front and center in the current news cycle with the one commonality being that barring significant personal convictions there is no mainstream investing approach to capitalize on these trends. This isn’t to imply there won’t be or that some investors in these spaces aren’t at the bleeding edge. It’s just the current risk reward potential is skewed more towards the speculative side.

I’m not immune to a degree of speculation so long as I can see a viable (personal opinion) business model and a path towards profit while – at the very least – making at least an incremental improvement to a problem facing society. One such conundrum hit my inbox this week in the form of a Greenpeace (Netherlands) video on plastic waste. I will first stipulate that there is a real (and growing) problem with plastic waste. I will further stipulate that one of the Greenpeace success stories has been to raise public awareness. But their pitfall, in my opinion, has been their dogged determination to play the all or nothing game. Their inability to claim a partial win to use as a steppingstone on the path towards proactive engagement in accomplishing even greater things can just as easily backfire.

  • Solid waste management plans have a typical hierarchy of:
    1. Reduce
    2. Reuse
    3. Recycle
    4. Waste minimization and WTE
    5. Landfilling

The fourth item is one that I identified last year as a viable investment candidate, particularly the WTE space. With incineration, the biggest drawbacks have been air quality (dioxin release) and ash disposal. While further advances in anaerobic digestion hold promise, Covanta (for one) is commercializing today’s technology to at least make one step forward in improving the quality of life.

So, no my approach is not a wholesale change agent, but more like W. Edward Deming’s theory of small incremental changes. Next week we return to the markets with end of quarter results and my inability to sidestep yet another dividend cut 😦

2 thoughts on “One More on Ecology

  1. I like your thought process Charlie – you’re definitely a bigger thinker than I am with your investment thesis! Many years ago I tried my hand at a similar approach with some aspects of renewable energy, but the issues and risks were far bigger than I realised – not least of which was or government constantly chopping and changing their policies…

    Liked by 1 person

    • I probably have more time on my hands to allow my ideas to run amok. My disappointment is in the inability to identify at least one viable investment avenue in this space. Much of this is definitional, some (as you point out) is ever changing government policies. Perhaps the greatest enemy is fear of change – which is a message that opponents have been quick to exploit.

      I may be proved wrong on multiple fronts – probably due to technological advances – but until then I tend to like WTE (including landfill operators) and look forward to the day they’re displaced.

      Appreciate the comment!

      Like

Comments are closed.