http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/ Hedge funds, portable alpha, 130/30 and alpha-centric investing Fri, 19 Mar 2010 07:52:26 +0000 http://wordpress.org/?v=abc hourly 1 http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/comment-page-1/#comment-96467 allaboutalpha.com: AllAboutAlpha.com Wed, 09 Apr 2008 02:58:06 +0000 http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/#comment-96467 [...] In a posting on November 26, 2007 (“Is There Alternative Beta in Alternative Energy”) AllAboutAlpha’s “Alpha Male” states that alternative energy returns over the past year have been both significantly correlated to general energy prices, and highly volatile.  This is true.  But as Alpha Male admits, alternative energy may provide alpha and alternative beta in the future in ways that we have not seen in the past.  For good reason, it will.  This is precisely why active management will yield significant benefits in this sector. Â  [...] [...] In a posting on November 26, 2007 (“Is There Alternative Beta in Alternative Energy”) AllAboutAlpha’s “Alpha Male” states that alternative energy returns over the past year have been both significantly correlated to general energy prices, and highly volatile.  This is true.  But as Alpha Male admits, alternative energy may provide alpha and alternative beta in the future in ways that we have not seen in the past.  For good reason, it will.  This is precisely why active management will yield significant benefits in this sector. Â  [...]

]]> http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/comment-page-1/#comment-60226 Steve Orr Sat, 08 Dec 2007 13:07:47 +0000 http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/#comment-60226 I disagree that PBW is XLE + noise. Beyond a clean energy play, ETFs like PBW reflect the need for energy development in general. It is likely we will be using more energy from all sectors in a growing global economy. The future will be more cars, planes, trains, houses, iPods... using energy more efficiently. We will need every solar panel, every acre of sow bean, every nuclear power plant, every wind turbine and every barrel of oil that can be extracted out of the ground. The rate limit to the next large scale global growth will be true fundamentals -- water, soil, land, industrial materials. Very few current in-place energy systems will be replaced. We will mostly add to the existing supply of energy. In regions of the world where it is expensive and time consuming to create large distribution networks for gas pipelines and electric grids - pocket-sized small regional grids with windpower and solar will be installed quickly and get people up-and-running much faster than a coal burner or a gas pipeline. As commodity prices continue to rise both XLE and PBW and others like them will rise with the rising tide of worldwide energy demand. Personally, I was hoping that Chavez would refuse to sell oil to the US as it would send markets even higher for both sectors and force a better energy security development for resource-poor nations (such as the US). As usual, politics will play a complicated and complicating role in the modification of these models. Much of the world's oil is in the hands of people that are highly motivated to deploy their own agendas. Alternative energy technology development is in the hands of scientists and engineers who are rapidly working the problem and are highly motivated. Altertive energy sources will play an increasing role in energy deliver as oil becomes more expensive to extract from more difficult locales. In aggregate both sectors will go up as demand contnues to grow. I disagree that PBW is XLE + noise. Beyond a clean energy play, ETFs like PBW reflect the need for energy development in general. It is likely we will be using more energy from all sectors in a growing global economy. The future will be more cars, planes, trains, houses, iPods… using energy more efficiently. We will need every solar panel, every acre of sow bean, every nuclear power plant, every wind turbine and every barrel of oil that can be extracted out of the ground. The rate limit to the next large scale global growth will be true fundamentals — water, soil, land, industrial materials. Very few current in-place energy systems will be replaced. We will mostly add to the existing supply of energy. In regions of the world where it is expensive and time consuming to create large distribution networks for gas pipelines and electric grids – pocket-sized small regional grids with windpower and solar will be installed quickly and get people up-and-running much faster than a coal burner or a gas pipeline. As commodity prices continue to rise both XLE and PBW and others like them will rise with the rising tide of worldwide energy demand. Personally, I was hoping that Chavez would refuse to sell oil to the US as it would send markets even higher for both sectors and force a better energy security development for resource-poor nations (such as the US). As usual, politics will play a complicated and complicating role in the modification of these models. Much of the world’s oil is in the hands of people that are highly motivated to deploy their own agendas. Alternative energy technology development is in the hands of scientists and engineers who are rapidly working the problem and are highly motivated. Altertive energy sources will play an increasing role in energy deliver as oil becomes more expensive to extract from more difficult locales. In aggregate both sectors will go up as demand contnues to grow.

]]> http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/comment-page-1/#comment-56780 Tom Konrad Fri, 30 Nov 2007 06:07:13 +0000 http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/#comment-56780 There's one other thing you're buying with clean energy: the ability to feel better about your investments. It may not make you extra money (although I believe it will with increasing GHG regulation), but knowing you're doing the right thing is worth a lot to some of us. There’s one other thing you’re buying with clean energy: the ability to feel better about your investments. It may not make you extra money (although I believe it will with increasing GHG regulation), but knowing you’re doing the right thing is worth a lot to some of us.

]]> http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/comment-page-1/#comment-54572 Tuesday links: stock/bond spread « Abnormal Returns Tue, 27 Nov 2007 17:19:50 +0000 http://allaboutalpha.com/blog/2007/11/26/is-there-alternative-beta-in-alternative-energy/#comment-54572 [...] Don’t expect alternative betas from alternative energy. “When you look at a two-year horizon, it would appear that the PBW is essentially an XLE with “noise”.” (All About Alpha) [...] [...] Don’t expect alternative betas from alternative energy. “When you look at a two-year horizon, it would appear that the PBW is essentially an XLE with “noise”.” (All About Alpha) [...]

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