Al Gore: Invest As I Say, Not As I Do
It’s a story that has everything . . .
The noble crusader fighting bravely for his cause. The evil, mustache-twirling villain. The Deus ex Machina to save the day.
At least that’s how Al Gore probably sees it in his fevered imaginings.
In reality, it is a tale of hypocrisy, crony capitalism, and the do-as-I-say-not-as-I-do liberalism we have come to expect from Gore and friends.
Al Gore also talks to investors. Since 2007, the former Vice President in Bill Clinton’s administration has been preaching the benefits of putting your money where his mouth is: Alternative energy . . .
Reading through the promotional materials he puts out through his company, Generation Investment, it is hard to tell whether his “Client Update” is selling investments in his Climate Solutions Fund or memberships in the Sierra Club.
“Scientific fundamentals continue to point to a need for urgent action on climate,” Gore says. Just like his Oscar-winning movie, “An Inconvenient Truth,” it has lots of cool charts and graphics.
Climate policy is still firmly on the political agenda and corporate climate-related activity is increasingly strategic. Innovation is driving costs down and improving the business case for low carbon and high efficiency solutions.
But the audience discovers that the preacher is living a double-life:
But if Al Gore has any message for investors today, it might very well be this: “Stay the hell away from alternative energy!”
Not that he would say so. At least out loud. . . .
Gore’s company files a quarterly report with the SEC that tells a different story about the 30 stocks in its portfolio. His company’s public investments in wind, solar, biomass and other alternative energy to combat climate change are practically non-existent.
But his portfolio is top-heavy in high-tech, medical instruments, and even more pedestrian investments in companies such as Amazon (AMZN), eBay (EBAY), Colgate Palmolive (CL), Nielsen (NLSN), Strayer University (STRA), and Qualcomm (QCOM).
He is also big in China, with stakes in a big Chinese travel agency, CTrip, and China’s largest medical equipment manufacturer, Mindray Medical.
And if you want a piece of the natural gas pipeline game — heavily dependent on the environmentally suspect fracking — you can find that in Gore’s portfolio as well with Quanta Services (PWR).
Golly . . . sure hope the congregation doesn’t find out!
Of course, every story needs a challenge for the main character:
If Generation Investment is a bit gun-shy on alternative energy, perhaps it is because of its catastrophic brush with First Solar.
Three years ago, First Solar seemed on its way: Interest in solar was at an all-time-high — as were subsidies for making, installing and using it. So America’s largest manufacturer of solar equipment seemed ready to cash in.
So did Generation Investment. According to SEC filings, Gore’s company bought 440,000 shares in late 2010 at about $130. By the first quarter of 2012, the value of First Solar — and just about every other solar manufacturer in America — had plummeted.
Generation Investment rode it all the way down, buying more and more shares as the price went lower and lower until finally it reached $25 in the first quarter of 2012. Generation Investment was holding 1.1 million shares worth about $28 million.
Sadly, not even the Deus ex Machina of government, riding to the rescue with taxpayer-backed loan guarantees, could save the Reverend Gore’s prized investment . . .
All this despite $3 billion in loan guarantees that kept many analysts talking about its great future. But the stock was always more popular with true believers in solar energy than with people who want to make money.
But there was one character who knew all along that nothing could save the tragically doomed, but oh-so-noble recipients of the finest gifts that crony capitalism has to offer. The evil mustache-twirling villain:
In the second quarter of this year, Gore et al. finally figured out what I have been saying to my clients, my listeners and my readers for two years: Alternative energy is a terrible investment and “sell everything under the sun.” That’s why I started shorting First Solar at $121 and kept shorting it all the way down to $33.
Of course, this is the point in the story when we get the big plot twist and realize that the villain is actually the hero (making money for his clients), and the hero is just another left-winger preaching to the rest of us about how we should live and then sneaking out the back door of the church when no one is looking.