Cover of MoneyWeek magazine issue no 439

Betting on money

12 June 2009 / Issue 439

How to win in the currency market... PLUS:

  • Get in on the green boom now
  • Cut your tax bill with zeros
  • The comic book hero who made $2.5bn


Buy into the green boom

When the credit crunch really kicked in last year and sales of organic boxes started to collapse, we wondered here if everything green – wind farm investment and the like – might go the same way. It hasn’t. Instead renewable/alternative energy has been one of the few beneficiaries of financial implosion.

Indeed, pretty much every stimulus package so far has included huge incentives for the industry. Obama’s stimulus plan shovels $300bn in, something its fans say all but guarantees double-digit growth for the sector for years to come. Even the Chinese are apparently set to announce new renewable targets of 15% by 2020 and 40% by 2040. It seems that instead of backing out of their commitments to renewables, governments have been using the recession to bump them up. It’s crowd-pleasing stuff.

It probably won’t work. It’s hard to see how all these wonderful-sounding targets can be met in the allotted time. From an investor’s point of view, this doesn’t matter. What matters is that governments keep pretending they can be met and chuck more subsidies and tax breaks at them. Given that it looks like they will, and given our long-term positive view on energy prices (the other big driver of the industry), it makes sense to have a reasonable long-term holding in new energy.

• Read the full editor’s letter here: Buy into the green boom