Guinness Atkinson Asset Management
Commentary
Investing in Electric Autos: Focusing on Enablers, Not Unicorns
The electrified automobile and its implications have captured the imagination of thematic investors, ranging from those interested primarily in automakers, to those interested in clean energy or autonomous driving technology.
Commentary
Oil Has Rebounded but Energy Equities Have Lagged. Is It over Already?
Energy equities have underperformed the S&P 500 materially over the last five years. While spot oil prices have risen significantly over the last twelve months, longer dated oil prices have not, and energy equities have remained under pressure.
Commentary
Alternative Energy Can Thrive Through Trump Era
by Edward Guinness, Portfolio Manager and Samira Rudig, Investment Analyst of Guinness Atkinson Asset Management,
The election of President Donald Trump in November created uncertainty for alternative energy investors due to his anti-environmental, pro-coal stance. His election puts the main alternative energy policies in the United States, such as the Investment Tax Credit (ITC) for solar installations, Production Tax Credit (PTC) for wind installations and the Clean Power Plan (CPP), at risk. Recently, his anti-environmental stance was put in to action with an executive order to dismantle environmental protections.
Commentary
"Blue Skies" Thinking in China
The Chinese leadership is now promising “to make our skies blue again” in a popular move to address an issue that has given rise to public protests across China against the industrial smog that blights so many cities. The solution to a pressing economic problem is now linked to an emotive popular issue.
Commentary
Asian Investment views on UK leaving the EU
The EU referendum result came as a surprise as we could see by the immediate reactions on Friday, June 24th in the currency and stock markets.
Commentary
5 Myths About the Recent Decline in the Stock Markets
The financial news in early 2016 hasn’t been good. When we say the news hasn’t been good what we really mean is that the news media has been hyperbolic in their treatment of the weak market. Here are a few of the adjectives used to describe market activity: nightmarish, plunged, dive, rocked, plummeted. And this is just from a single article! Yes, we know the market is down and frankly we’re not happy about it. But…
Commentary
It's Darkest Before the Dawn – but Is the Time Now 1am or 5am?
It has been a pretty brutal summer for the energy markets. Brent oil fell from $65 in May to below $40, and the MSCI World Energy Index was down around 25% over the same period, leaving energy as the worst performing sector year-to-date and the most out-of-favour among all the portfolio manager surveys that we see. Long-dated Brent oil has also fallen; having started the year at $78 and traded in a fairly tight $75-$80 range until the end of June, it fell to a low point of just over $60, over 40% off its highs last year.
Commentary
Equities, Dividends & Rising Interest Rates
With interest rates at generational lows and what is likely an improving US economy, it is natural to contemplate or even worry about the possibil- ity of rising interest rates. Common perception is that rising interest rate environments are generally not favorable to equities and income oriented in- vestments. This is certainly true for bonds1 whose prices move directly and inversely with changes in interest rates. But is it true for equities in general and for dividend paying stocks in particular?
Commentary
China’s Roaring Market
Chinese stock markets have roared in the past year, since May 2014. The Chinese government has announced a $40 billion “Silk Road” fund to build a network of railways and air links to bring China and Central Asia closer together; China launched the Asia Infrastructure Investment Bank in October 2014, and since then there has been a rush to join, not only from China’s neighbors, but also five of the G7 leading economies.
Commentary
Solar Growth Not Impacted by Oil
The recent fall in the oil price has caused the share prices of solar stocks to fall. This fall is indicative of a growing negative sentiment towards energy investing, but it is not supported by rational analysis of the economics of the solar industry.
Commentary
OPECs Thanksgiving
The Organization of the Petroleum Exporting Countries (OPEC) meeting ended on 11/27/14, Thanksgiving Day, with the decision to leave their production quota unchanged and no clarity on when a cut might be forthcoming. The lack of any quota cut, combined with little indication that OPEC were particularly focused in the short term on quota compliance, caught the market by surprise. Crude oil prices and energy equities fell sharply.
Commentary
To Meet Or Not to Meet
We do not generally consider meeting management as a high priority, nor a prerequisite for investment, as some do. We much prefer to focus on the objective metrics of a company such as long-term profitability, balance sheet metrics, valuation etc. There are two main reasons for this. First, it is impossible to assess the impact of management or quantify the degree of success or failure that should be attributed to management in any objective way. Second, meeting management can put your objectivity at risk.
Commentary
Physics Envy
Economists have long sought to identify a deterministic "natural law" of markets in the same way that physicists have discovered natural laws such as gravity and electromagnetism. This is sometimes referred to as "physics envy". If economists could identify a deterministic natural law of markets then we would be able to make useful and accurate predictions. Sadly no such law exists. Human actions are not governed by simple predictable laws.
Commentary
Iraq Crisis Impact on Oil?
The rise and rapid expansion of the Sunni enclave known by its new rulers under Abu Bakr al-Baghdadi as the Islamic State of Iraq and al-Sham (or ISIS; al-Sham means greater Syria) comes as no great surprise. No-one can predict how far it can expand or how quickly it will be crushed (if ever).
Commentary
Why the U.S. Should Export Crude Oil
The Ukraine-Russia crisis, as well as Russias position as a major energy provider, has renewed the discussion on whether the US should export crude oil. A forty year old decree bans U.S. producers from exporting crude oil, and it needs to be repealed. It represents misguided protectionism and is a hangover from the days before the US embraced free trade. We think that exporting crude oil would be an economic benefit to the US, as it incentivises the full development of the US shale resource.
