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 😦

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‘Tis The Season

It’s getting to be that time of the year and since I don’t think the grandkid reads this thing, I figured I’d share one of the presents she’ll be getting.  Just to review, each year since she came to live with us she has received shares in a company as a gift. This gift has been purchased in a company DRIP, established as a Custodial Account of which I’m the custodian. Generally, the company is one in which she can relate, i.e., Trix was her favorite cereal as a kid hence the General Mills stock.

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6 Degree Investing

Six degrees of separation is the theory that everything is six or fewer steps …
“Invest in what you know (coupled with serious fundamental stock research)” attributed to Peter Lynch
“Own What You Love” Loyal3 slogan
These are common themes used widely among investors. Presuming due diligence has been performed and ones minimum requirements are attained it makes perfect sense. One example is my granddaughter’s portfolio. Each Christmas she receives a stock that she can relate to and one with a company sponsored DRIP. Her first was General Mills as she liked Lucky Charms. When she studied US history it was Washington Gas Light (WGL) as they keep the Capitol lit. Over the years her portfolio has grown to also include Hershey, Walmart, Procter & Gamble, Union Pacific, Disney and Kraft-Heinz. This year’s addition was Texas Instruments since she applied – and was accepted – to a high school sponsored in part by them. It is a moderately diverse portfolio, but more important is the fact that she can identify with it.  Although none are owned through Loyal3, it is a kind of Own What You Love portfolio.

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