In his recent post on WUWT Why are Renewable Equipment Companies Such Poor Investments? Steve Goreham shows us that virtually no publicly traded companies making wind and solar equipment, electric vehicles, hydrogen battery cells or electrolyzers, or EV charging providers have been good investments. As a whole, based on the global Renewable Energy Industrial Index of the 30 largest global companies in the sector, investors would have made no money since 2006. Without the one giant blow-out winner - Tesla - there would have been big losses.
The reason he says is quite simply that none of these companies are financially viable profitable businesses. They have not been able to make money in general even with massive government subsidies. One commenter below the post notes the venerable Warren Buffett's pithy assessment of wind and solar: “without the subsidies and tax breaks, they just don’t make financial sense”.
Goreham notes that the investor in the S&P 500, available through multiple low cost ETFs, would have quadrupled their capital. Therein lies the durable critical lesson for most of us small-guy investors. Recognizing that very few of us have the time, the smarts, the information or the interest to find the Tesla pot of gold, we are far better off to resist the latest investment fad and invest in broad whole of market ETFs. By their construction, indexes like the S&P 500 will incorporate winners like Tesla. Tesla is currently the 6th largest holding in that index. The many losers aren't there frittering away your capital at all. Sure, you won't be among the early now much richer investors in Tesla but you will be modestly richer and not poorer.
In Canada the current poster-boy glamour stock is Shopify. It has come from nowhere twenty years ago - the company did not even exist then. The company only went public in 2015. Yet it's now the second largest company by market cap in the dominant Canadian index, the S&P TSX60. Its stock price is extremely volatile and the PE ratio is an astronomical 97, i.e. it is priced for massive future growth. Want a piece of the action? Buy the stock directly itself ... or more cautiously, buy an index ETF like BlackRock's S&P TSX 60 (XIU) or Global X's offering (HXT).
