Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup
  • Dick Young’s Safe America

Gavekal Chairman: Renewables Bubble is “Stupidest” Ever

January 7, 2021 By Jeremy Jones, CFA

By iQoncept @ Shutterstock.com

Gavekal chairman, Charles Gave, calls the renewables bubble “the stupidest that I have seen in my career.” When Tesla is trading at 1,000 times trailing earnings, it’s not hard to see why. Greg Ip reports in The Wall Street Journal:

Whether investors one day regret paying so much for Tesla Inc. stock, they have done the planet a favor. Their enthusiasm enabled the company to raise enough money to stay afloat until it could profitably mass produce electric cars while accelerating other manufacturers’ rollouts.

Tesla, trading at more than 1,000 times trailing earnings, is only the most extreme example of a euphoria that has swept green energy. From the end of 2019 through Tuesday, a fund that tracks a Nasdaq clean energy index had risen 191% compared with the broad market’s 15%. It trades at 52 times trailing earnings, nearly double the overall market’s already-historically high multiple. More than a third of its 44 constituents are losing money. On Wednesday afternoon it was up 7% on expectations Democratic control of the Senate would lead to more support for renewable energy.

“The bubble in renewables is probably the stupidest that I have seen in my career,” Charles Gave, chairman of money manager and research firm Gavekal, wrote last month.

Stupid, however, isn’t the same as useless. Some bubbles can be hugely destructive, as we saw with housing 13 years ago. Others are socially useful. Private markets generally provide too little incentive for risky innovation because shareholders only capture a small part of an innovation’s benefit; most goes to consumers (think of a life-saving drug). A bubble can overcome that market failure as investors shower capital on countless new ventures they hope will be the next Microsoft Corp. or Amgen Inc. Even as most of those ventures fail, they extend the technological frontier.

Read more here.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • The EV Bubble Is now Undeniable
  • The Electric Vehicle Bubble
  • More on the EV Stock Bubble
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. Richard C. Young & Co., Ltd. was ranked #10 in CNBC's 2019 Financial Advisor Top 100. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • Good Timing? Virgin Galactic Shares Tumble After Chairman Sells Shares - March 5, 2021
  • Which Fossil Fuel Wins in a Shift to Renewables? - March 4, 2021
  • Depositors in Europe Now Being Charged by Banks - March 2, 2021

Search Young Research

Most Popular

  • Welcome to the Interest Rate Prediction Business, JACK!
  • Democrats Have a Plan: Don't Get Too Attached to Your Capital Gains
  • Teaching A Family Investment: Warren Buffett’s Annual Letter and You
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • Bubble in Tech Stocks Will Cause "Clean Out" in Markets
  • The Power of a Compound Interest Table
  • Richard Young Reports: The Great Money Explosion and Disasters
  • Joel Kotkin: Economic Civil War
  • The Highest Yielding S&P 500 Stocks
  • Depositors in Europe Now Being Charged by Banks

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • MAP: Track the States With No Mask Mandates
  • Remind Us Why Washington Needs to Spend $1.9 Trillion
  • Your Social Life During the Pandemic and MORE
  • Hidden Agenda: Bill Gates’s Ulterior Motives
  • Does the Left Think Black Kids Are Too Dumb to Learn Math?
  • Secession: Impossible? Not if You Think Locally
  • RIP Bunny Wailer
  • Richard C. Young: How About Joining Us in Key West
  • The Preposterous Fabrication from the Biden Administration
  • Richard Young Reports: The Great Money Explosion and Disasters

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2021 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.